This week, we explore how sunk cost fallacy affects our decision-making, and dive into the things we can do to help us "stick to a plan". Adam talks to two fitness industry people about recent and future challenges, and what kind of gym is best for you.

In the peaceful and optimistic mid 2000s, I was posted to Russia where one of my favourite jokes was:

  • New Russian One: "I like your tie, where did you get it?"
  • New Russian Two: "I bought it for $200 at that shop across the street."
  • New Russian One: "Oh you're an idiot! You could have bought it for $300 round the corner."

A satirical reflection of the growing nouveau riche, the joke went down well. But there can be a serious reason to overpay for some things. You are more likely to pick out your $300 tie from your draw if you only spend $200 on the alternatives.

Logically, it doesn't make sense. But we're not logical. Wearing the more expensive tie more often doesn't make it better value for money. However, the sunk cost fallacy described in Kahnemann's 'Thinking Fast and Slow' masterpiece causes us to reach for it more often.

In this week's episode of Office Hours I talk to two Luxembourg sports club managers to answer questions that include "Which gym should I join?". In addition to the reasons we covered, I have realised another right answer may be - 'the most expensive one'.

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If you are paying €10 a week for gym membership and are unsure about whether to haul yourself up from the couch you may stay motionless, writing off the cost of a single drink. But if you know you are spending €100 a week, you may suddenly find motivation to pull yourself away from TikTok reels.

There are however alternatives to using the sunk cost fallacy as a commitment device.

For example, arrange to work out with a friend. My main sport was squash, an individual sport with no substitutes. If I didn't turn up, I would leave a very angry playing partner stood by the court who would refuse to arrange games with me again.

Telling your friends and loved ones that you will go to the gym every week will subconsciously make you go more.

Packaging the workout with something you really enjoy can help. For example, limiting yourself to sweet treats from the gym bar or the coffee shop on the way home from the workout.

If you are looking to get fit, I recommend you find the right commitment device for you. And if you see me at the coffee shop with a gym bag buying a cookie, don't worry, the tie I am wearing is more likely to have been bought for €30 in Trier, than €300 in Moscow.

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