March 12, 2018
Imagine that you've put in effort toward a goal, but things haven't quite worked out the way you hoped. How do you know when it's time to let it go?

Summit Fever

After you listen

Your investment decisions should be made with an eye toward the future, not the past.

Your investment decisions should be made with an eye toward the future, not the past.

Maybe you've set a goal that was more expensive than you expected; maybe it's taking longer to reach than you thought. So the question is, do you double down and continue to work toward that increasingly difficult goal, or do you move on to something new? Do you fish or cut bait?

On this episode of Choiceology with Dan Heath, we look at how past effort, time or expense can influence the way we make decisions moving forward—even when they shouldn't.

The episode begins on an auction house floor but quickly climbs to the top of the highest peak in the world. Along the way, you'll see how common is the lure to continue no matter what, and how it affects all kinds of decisions, big and small.

  • Professor Michael Roberto explains how to identify this bias in your day-to-day life. You can read his paper on how it may have influenced some life-and-death decisions at the top of Mount Everest.
  • Climbers on the ill-fated 1996 Everest expedition recall the tragedy. Lou Kasischke's book on his experience is called After the Wind.
  • A story about Intel CEO Andy Grove—one of the most successful business leaders of the 20th century— reveals one way to fight back against the influence of this trap.

Choiceology is an original podcast from Charles Schwab.

If you enjoy the show, please leave a rating or review on Apple Podcasts.  

Learn more about behavioral finance. 

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Nudges are small but powerful parts of choice architecture.