by Raj Attiken  |  5 September 2019  |  

Eating in restaurants tests my resolve to be temperate in my diet. I don’t always know how large the servings will be when I order from a menu. After I enjoy part of the meal and feel satiated, I realize that I probably shouldn’t eat any more. The smart decision would be to stop right then. But, the impulse to get my money’s worth prods me to continue. 

It’s the same impulse that prompts me to hang on to unworn clothes that were expensive, or to finish a project I started although I no longer find it useful.

Economists have a term to describe this behavior. They call it the “sunk cost fallacy.” Sunk cost fallacy is the idea that one is more likely to continue with a project if you’ve invested a lot of money, time, or effort in it, even when current or future benefits are questionable. It describes why it is so hard to walk away from anything in which we have invested money, time, or effort that we cannot get back. 

Some economists view the sunk cost fallacy as being irrational, as “throwing good money after bad.” Individuals and organizations are equally prone to fall into the sunk cost fallacy. Author David McRaney claims, “Every garage sale is a funeral for someone’s sunk costs.”

The first commercial supersonic airliner, the Concorde, was predicted to be a failure early in its construction phase. But much had been invested in it already and so the construction continued. Against their better judgment, the designers finished the project and launched the Concorde’s first flight in 1969. But on October 24, 2003, the era of supersonic commercial air travel came to an abrupt end with British Airways’ final commercial Concorde flight from New York’s JFK International Airport to London Heathrow. The sunk cost fallacy is sometimes now referred to as the “Concorde fallacy.”

The “sunk cost fallacy”—continuing an endeavor or pursuing an option to preserve an institution, practice or belief, largely because of the time, money, or other resources we have already invested in them—is a major challenge for leadership within churches and religious organizations. We have a difficult time facing two competing visions: preservation of the past and embracing the future. How to fit these two visions into one effective strategy has been a dilemma.

Institutions and Policies Are Not Immaculately Conceived

Institutions and organizations are human inventions.  They are not conceived or designed by divine fiat. But over time some institutions become regarded as divine establishments by those who belong to them.  The human tendency is to do whatever it takes to keep them alive. Pouring resources into them can seem a sacred duty. 

The sunk cost fallacy affects the Adventist denomination in at least four levels: the organization’s institutions (colleges, academies, churches), the methods and practices it uses in its operations (many are codified in the denomination’s “Working Policy” and Church manuals), its organizational structure (General Conference, divisions, unions, conferences), and its fundamental beliefs.

I chaired the board of a hundred-plus-year-old boarding academy for several years. In recent decades the institution had experienced steady losses both in enrollment and financial stability. It had to be heavily subsidized each year in order to keep it afloat. Discussions about its future were usually charged with a lot of emotion and passion. The prospect of losing an institution into which millions of dollars and enormous amounts of time and effort had been invested was too intense for many. They would rather see a failing institution propped up with heavier investments into an unforeseeable future than to bear the thought of losing the investments that had already been made. For a long time, the sunk cost fallacy swayed the decision.

One conference president reported that when the future of his conference’s academy was being considered, one person said to him, “I don’t care if you don’t have any students, you’re still not going to close our academy!” 

It comes into play also at the level of colleges and universities. The final chapters in the life of Atlantic Union College included efforts to keep it on life-support long after even ardent supporters and alumni realized that it was no longer a viable institution. The effort to save the institution, which has been established in 1882, even included shutting it down for four years before reopening in 2015. Its last troubled years not only meant badly spent money, but educational decisions that caused complications for students and difficulties for leaders.  

Small, declining congregations battle with sunk cost bias when making decisions about their future. There are members (some of whom literally helped construct the church building) arguing for preserving the congregation and its building at any cost. If any are willing to dispose of the building and opt for alternate ways to pursue congregational life and ministry, they are usually outnumbered. Even merging declining congregations is resisted. The sunk cost fallacy plays a huge role in the decisions at these meetings.  

The sunk cost fallacy is probably responsible for keeping alive various denominational and church policies, practices, and methods on which years and even decades of time, effort, and energies have been spent. Those who have witnessed attempts to get a denominational policy changed, or something in the Church Manual revised, know how difficult it is. The upcoming General Conference Session will again showcase an outmoded, costly, and inefficient practice of decision-making that holds the accumulated investment of decades of emotion, experience, beliefs, and tradition. 

I recall a period in our experience as a church in North America when organizational structure and design were frequent discussions at meetings. “We need a more flattened, nimble and efficient structure,” some argued. Others celebrated the virtues of our century-old hierarchical structure. Various organizational models have been designed and studied over the decades. But, for the most part, the multi-layered hierarchical structure has been maintained, despite its obvious inefficiencies and irrelevance in the 21st century. 

Why has it been so difficult for the Adventist Church to abandon—or at least significantly modify—an organizational model that was designed for horse-and-buggy days? I suspect that it is—at least in part—due to the sunk cost fallacy. We have a lot invested in the current model, even to the extent of adapting our ecclesiology to support it. It would be painful at many levels to adopt a fresh model.

The sunk cost fallacy could be a factor also in our reluctance to reconsider the validity and relevance of some of our long-held beliefs, and even of errors in biblical interpretation or theological formulations. Having poured years and decades of effort and influence into defending the validity of a doctrine, we resist efforts to question its veracity.  Change, if it ever occurs, happens through default, as the belief evolves over time into something more sound and sensible. 

What Fuels Our Bias?

When it comes to the Church’s institutions, policies, and beliefs, the sunk cost fallacy is fueled by several elements. 

Sanctity: Some human institutions and organizations take on an aura of sanctity over time. Those who belong to them believe that God was instrumental in conceiving the institution in its current form and we dare not tinker with it. Shutting down or reimagining such a long-established institution could summon the displeasure of God. The divinely sanctioned task, therefore, is to preserve the organization in its current form.

Prayer: Some hold that prayer—before and during decision-making processes—ensures that the decisions we make will be aligned with God’s will, and be met with divine guidance and approval. Prayer seems to relieve us of some of the responsibility to be rigorous, careful, informed, and responsible in our decision-making.

Politics: The power networks within the church can often be more easily preserved by maintaining or preserving the structures that advantage those in power. New structures and systems may reduce or even eliminate that power. 

Reputation: To a faith community that has prided itself on being right in our understanding of Scripture and our formulation of doctrines, an admission that a particular belief in which we have invested years of our reputation no longer has meaning, relevance, or credibility can be both demoralizing and debilitating. 

Fear: Fear makes us feel that a desirable future is impossible without an institution, policy, or fundamental belief in its current form. Fear of the unknown future tends toward preserving the known past. The urge to avoid pain is often greater than the yearning for future success. 

Myth: Often, the stories we tell ourselves about past glories (particularly about institutions) are exaggerated and romanticized. We yearn for those fantasized days to return, and believe that we can make them return. To give up on the institution as we have known it, we fear, is to abandon any possibility of the return of that glorious past.

The Necessity of Change

There is some value in knowing and understanding those events and movements in our past that have shaped us as a faith community. “We have nothing to fear for the future,” wrote Ellen White, “except as we shall forget the way the Lord has led us and his teaching in our past history” (9T10). 

There is a difference, however, between not forgetting the past and preserving the past. Preserving the past, at any or all costs to the future, may not only be a costly choice but also a detrimental one. God has not bestowed eternal life on institutions, policies, or belief systems. Some of them merit revisions, some extinction. “The fact that certain doctrines have been held as truth for many years by our people is not proof that our ideas are infallible,” wrote Ellen White (R&H, Dec. 20, 1862).  “We have many lessons to learn,” she wrote, “and many, many to unlearn. God and heaven alone are infallible. Those who think that they will never have to give up a cherished view, never have occasion to change an opinion, will be disappointed.” (R&H, July 26, 1892).

We like to believe that the decisions we make are rational and are based on the future value of our investments, experiences, and objects. The reality, however, is that our decisions are often tainted by the emotional investments we accumulate, and the more we invest in something the harder it is to abandon it. 

There is no perfect way to consistently avoid sunk cost bias. But as individuals and as a church organization, we can be alert to, and wary of, letting this bias sway our decisions. We can be more deliberate in our decisions whether or not to keep institutions, structures, policies, or beliefs alive merely because of past financial, physical, emotional, or reputational investments we have made in them. A helpful step in this process would be to courageously acknowledge and admit that some things are broken or have outlived their purpose, usefulness, or relevance. We must not let our past investments deter us from making new and fresh investments for the future. That’s my take! 

Dr. Raj Attiken is an adjunct professor of religion at Kettering College, the Adventist higher education institution in Dayton, Ohio, and former president of the denomination’s Ohio Conference.

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