I was in a meeting today, discussing the beginnings of a new project for work. Essentially, I've been testing out a framework for the past month or so to try and see if it would be a good tool for standard use in the department.

The focus of the meeting eventually shifted toward the idea of abandoning the framework, not using it at all on this new project. I could see that this idea caused some discomfort in my manager. Then, he said "of course, that would mean that the entire last month or two for Russell has been a waste."

The other guys in the meeting had concluded that the alternative was a better option. Perhaps he had, too. What was keeping him back was not the benefits/disadvantages of this course of action, but what that would mean for my past action. Certainly, I could see where he was coming from. After all, it was my time.

If you play poker, you know this dilemma by name: pot committment. Maybe you had good odds to catch a straight, so you made a strong bet. But fourth street didn't help you. What's more, it made the odds of a flush pretty high, and you certainly don't have a flush. Further, you're pretty sure your opponent does, and he just made a pretty strong raise.

Say you've invested 10% of your chips to the pot already. Do you fold? What if you've invested 25%? 50?

That's the problem. The more money you have committed already, the less likely you'll be willing to cut your losses. It's not something we've learned from socialization, it's actually an ingrained aspect of human cognition.

We like to play it safe with rewards, but when it comes to cost/loss minimization, we are very likely to take risks. An interested experiment showed that when people are given, say, $100 and they are given the choice between $50 more or flipping a coin for $100 or $0 more, people will most often take the safe bet, they'll take the 50 extra.

But what happens when they are presented with a profit loss scenario is more telling. When subjects are given, say, $200 and are asked to choose between a 50 dollar deduction or flipping a coin for either a $100 deduction or $0 deduction, most often people will flip a coin.

What's the difference? Most people are much more uncomfortable with the idea of losing any amount than they are comfortable with the idea of gaining the same amount.

But what is the right choice? Let's go back to our poker example. What influence does your previously invested money have in the current moment? If you've already put $1,000 into the pot, does that make your hand better? Does it make your opponent's hand worse?

No, the amount of money you've already committed to a pot has no bearing on the strength of your hand. Yet, as I explained, it has a lot of bearing on whether or not people make the call.

Trying to fix this requires directly challenging an age-old built-in facet of human cognition. But really, it's simpler than it sounds.

Think of it this way: the money you've already committed to the pot isn't your money anymore (and that's actually true). Every call you make is a blank slate and you have no prior commitments to that hand.

Finally, translate that into real life. The amount of time, energy, money whatever that you've put into something isn't yours anymore. Regardless of the decision you make in the present, that time or energy or money has already been spent.

Your final decision should be based on the absolute gain/loss to be had here and now (and, of course, in the future), not on any perceived attachment to previously-expended resources.