Sunday, February 15, 2015

Sunk Costs and Sunken Hopes

Megan McArdle, the popular writer on economics, wrote eloquently and with brutal honesty this Valentine’s Day about the problem of sunk costs in dating and cohabiting relationships: Happy Valentine's Day! Now Cut Your Losses. She describes everything I often write about here and elsewhere, and that my colleague Galena Rhoades and I emphasize in our research on cohabitation and dating. Quoting McArdle:

I'm talking to you, 30-something woman who has been dating the same guy for a couple of years (or more), maybe already moved in together and started picking out that furniture. The one who is ready for those babies, or at least a joint tax return, and would like to get the matter settled as soon as possible. The one who is anxious that her partner doesn't seem as eager as she is but is afraid to deliver an ultimatum for fear the answer will be "OK, bye."

Here's the thing, though: The guy who leaves you because you deliver an ultimatum is probably also the guy who is going to leave you a couple of years later, having wasted more of your prime dating years on his dithering.

That is right on. McArdle, being an economist, recognizes this situation as the problem as a form of the sunk cost fallacy. Humans are prone to hanging onto something because of what is already invested. We seem optimized to avoid losses. Thus, people tend to hang onto some investments where the loss is already irrecoverable. In business parlance, one is throwing good money after bad. This happens a lot because people tend to believe, even want to believe, that their past behavior was rationale: “If I've already put this much into this relationship, it's got to have been smart and it's got to pay off!” Sunk costs are too often not sunken treasure when it comes to waiting for commitment--that's the fallacy as applied here.

In many relationships where one partner is more committed than the other, and waiting for the other to step up, those investments may be already lost. As McArdle so eloquently describes, waiting too often means taking even bigger losses when the day of reckoning finally comes.

Galena Rhoades and I believe that cohabitation plays a large role in this because of the way it increases inertia to stay together, often well ahead of the development of mutually high and clear dedication to be together. (Anything that makes it substantially harder to break up before it's really clear that two people have a future together can play this role: babies, deep one-sided attachment, and so forth.) For example, we have shown in many studies* that those who cohabit before clear, mutual plans to marry (as in marriage or engagement) do not tend to fair as well in marriage. Nothing here means people are doomed or anything. We're talking about relative odds of achieving the best possible outcome in life.

As you can see above, McArdle identifies the problem of waiting to marry someone who never will get there--and she notes how it's often associated with cohabitation. While she's focused on those for whom marriage is not coming with a given partner, we have also noted the problem of the constraints being great enough that some people marry someone they otherwise would have left--before marriage.  None of these paths are ideal.

What I like so much about McArdle's piece is that it's personal. She's describing her own life and what it took to accept the fact that her past partner was not ever going to marry her. She got up, moved out, and moved on. Life is much better now. See her story. It’s really all about what we call asymmetrical commitment in dating and cohabiting relationships. It is noteworthy that, in one of our studies, we found that asymmetrical commitment before marriage is far more likely among those couples who cohabited before rather than after being either married or at least engaged, and that these substantial asymmetries continued right on into marriage. It matters how clear things are before you do something that makes it harder to break up.

In the report we did last year for the National Marriage Project, Galena Rhoades and I presented analyses from our national data set on premarital factors that are associated with marital quality. We found that when one partner perceived his or her commitment as being stronger than the other partner’s before marriage, he or she later reported lower marital quality than those who did not perceive such a difference in commitment. It was one of the strongest premarital predictors of eventual marital quality that we studied. (see the Before "I  Do" report, pages 12 & 22.)

You may wonder how people get stuck so easily in the wrong place. It's not rocket science. The video our team released last week explains this in about as clear of terms as possible (Relationship DUI). It will take 4 minutes of your time to watch it, and it will make sense. It's really quite simple but it describes what people too often do not see until they see it all too clearly.  

If you are looking for lasting love for life in marriage, be careful about things that make it harder to break up before you’ve actually made your choice--and that choice needs to be mutual.

* If you want a narrative summary of our studies and papers related to these themes, with citations and abstracts, see this document.

Disclosure: I am a partner in the company that publishes the online intervention, ePREP, that is linked as a resource. at the end of the Relationship DUI video.