MONTHLY MULLING💡
Sunk, Soared & Seen: Exploring Sunk Costs, Matthew Effect & the Spotlight Trap
Hi👋 Tapan here.
Monthly Mulling is a 2x monthly newsletter with 3 timeless ideas to help you make better decisions in your life and career. Join now👇🏽
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Happy Sunday y’all!
✍🏼 New Articles:
🫡 A Guide To Being Intolerant: The 10 Commandments For A Narrow-Minded Life
🔬 The Dunning-Kruger Effect and Theranos: A Cautionary Tale of Overconfidence
⚓️ Business Lessons from Mahabharata: Overcoming Sunk Cost Fallacy and Improving Decision Making
📖 Currently, I am reading: Discipline Is Destiny by Ryan Holiday
Ryan Holiday introduced me to Stoicism, and Obstacle Is The Way (🔗 important lessons here) remains one of my favourite books. Discipline Is Destiny is another gem in the "Stoic Virtue" series, celebrating the power of self-discipline. To master anything, you must first master yourself—your emotions, your thoughts, and your actions.
🎲 Rolling the Dice: The Sunk Cost Fallacy and the Mahabharata
Did you know that the psychological trap of the sunk cost fallacy is also present in the ancient Indian epic, Mahabharata?📜
The Kauravas, led by the cunning Duryodhana, invited Yudhishthira, the eldest Pandava, to a game of dice. Little did Yudhishthira know that the Kauravas had a trick up their sleeves, with Shakuni’s (his uncle) loaded dice ensuring their victory.
The game began innocently enough, with Yudhishthira placing small bets and losing them. But as the game progressed, the stakes escalated. Unable to walk away, Yudhishthira found himself deeper and deeper in debt.
He gambled away his cows, clothes, ornaments, servants, kingdom, brothers, and even himself. With nothing left to wager, he gambled away his wife, Draupadi (😱).
This disastrous game set the stage for a series of events that would eventually lead to the great battle of Kurukshetra.
🧐 Let’s look at another example of sunk cost fallacy -
🧠 The sunk cost fallacy is the idea that we're more likely to continue investing time, money, or resources into something because we've already committed to it, even if it's no longer in our best interest to do so.
I have written an article on this topic discussing real-life examples and how can you overcome the sunk cost fallacy - check it out!👇🏽
🥇 When More Means More: The Matthew Effect
Three servants were each given talents (unit of weight) of gold for safekeeping by their master according to their abilities.
The first servant received 5 talents of gold, the second received two, and the third received only one.
The first two servants invested their talents of gold and earned a return. The third servant buried his talent of gold to keep it safe and earned nothing.
After a long absence, the master returned and asked for an account of the talents of gold entrusted to them.
The master rewarded the first two servants and punished the third, taking away his talent and giving it to the first servant.
For to everyone who has, more will be given, and he will have abundance; but from him who does not have, even what he has will be taken away.
- Matthew 25:14-30
This anecdote, known as the "Parable of the Talents" from the Gospel of Matthew, inspired Robert K. Merton to coin the term "Matthew Effect."
🧠 Matthew Effect is the tendency of individuals to accrue social or economic success in proportion to their initial level of popularity, friends, and wealth. It's like the rich get richer and the poor get poorer.
Where else have you observed the Matthew Effect? 🤔
🎶 Music: Popular artists receive more playtime, promotion, and collaboration opportunities, leading to further success and exposure. In contrast, less popular artists struggle to get their music heard and gain a following.
You will see that upcoming talented musicians are always looking for that viral Instagram Reel for exposure whereas, you will receive a push notification whenever Olivia Rodrigo releases another song.
🎓 Education: Ivy League universities, such as Harvard, Yale, and Princeton, have long been considered the most prestigious and elite universities. However, their reputation and status are largely self-perpetuating, as they attract the best and brightest students, faculty, and funding due to their reputation and resources. The students studying in these universities will build a better network, get nicer jobs, and earn bigger paychecks. 💰
👨🏽💼 Jobs: Individuals with more experience and better credentials tend to have an easier time finding employment and negotiating higher salaries. This creates a cycle where successful professionals continue to accumulate advantages, while those who lack experience or credentials may struggle to get hired or earn competitive wages.
👀 Feeling Watched? The Spotlight Effect in Everyday Life
Have you ever felt like everyone's eyes are on you when you walk into a room? Well, the truth is, they're probably not.
🧠 The Spotlight Effect is the idea that we, as humans, overestimate the degree to which other people notice or observe our appearance or actions.
This tendency keeps people from being themselves due to an irrational fear of judgment.
For example, imagine you show up at the office after a night with too little sleep. You feel sluggish and unfocused all day, and everything you do seems to go wrong. At the end of the day, you sheepishly apologize to a coworker for being "useless all day." They look at you, slightly confused, and say, "You seemed fine to me." 🤷🏽♂️
Now you're confused. Are they just being nice, or did they actually think you were fine? 🫠
The reality is that other people pay much less attention to you than you think. They're often far too absorbed in their own subjective experiences to pick up on subtle cues related to the feelings of others.
Tbh, it's liberating to realize that most people don't really care about you.
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