Design Follies – ‘I paid for it so you have to use it’

Sunk Costs

The Daily WTF is almost always good for a laugh (or a facepalm, at least). It’s even been the inspiration for posts on error handling and dependency management. The June 24th post, “The System”, is yet another one that I have to comment on. You have to read the full post to fully appreciate the nature of the “system” in question (really, read it – it’s so bad I can’t even begin to do it justice via an excerpt), but the punch line is that it’s so wretchedly convoluted due to the fact that one of the components of it was a “significant expense”.

The term “sunk cost” refers to a “cost that has already been incurred and cannot be recovered”. Although economic theory asserts that sunk costs should not influence future decisions, it’s a common enough phenomenon. The sunk cost fallacy (aka escalation of commitment) is the academic term for “throwing good money after bad”. It’s common in endeavors as disparate as business, gambling, and military operations. Essentially, a person operating under this fallacy justifies spending more money based on the fact that they’ve already invested so much and to abandon it would be a waste. Needless to say, this can easily become a death spiral where ever larger sums are wasted to avoid acknowledging the original mistake.

In the IT realm, the sunk cost fallacy can lead to real problems. Weaving a poorly chosen platform/component/service/etc. into your applications not only wastes money and effort up front, but also complicates future efforts. Quality of service impairments (e.g. maintainability, performance, scalability, and even security) can quickly add up, eclipsing the original cost of the bad decision.

One area where sunk costs are quasi-relevant is when a given capability is adequate. Theoretically, you’re not really considering the prior cost, but deciding to avoid a new cost. In practical terms, it works out the same – you have something that works, no need to pay for a redundant capability.

Beyond being aware of this particular anti-pattern, there’s not much else that can be done about it in many instances. Typically this is something imposed from above, so beyond getting on the record with your reservations, there may be little else you can do. If, however, you’re in a managerial position, reducing the cultural factors that promote this fallacy could serve you well.