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What do the following scenarios have in common: repairing a car, gambling, a bad relationship, a poor book or movie, a war, an economic investment, a career choice? Each of these situations have the potential to put us in a position where we might have “too much invested to quit.”
For example, once you’ve invested $2000 in a new transmission for a older car, what do you do if the AC system goes and needs $2000 to make it work? Another $2000 is a huge amount, but you just spent $2000 on the transmission. Do you cut your loss and purchase a new car for $30,000, or do you have too much invested to quit and decide to pay the second $2000? What happens when the alternator goes out a month later? You get the idea.
The same phenomenon occurs when a poker player has lost money, but feels he/she can recoup the time and money spent with just one more hand. Also similar is watching a movie for two hours, only to have the network increase the frequency and duration of commercials. The last hour you are watching more commercials than movie, but you have too much time invested to turn it off and not see how it turns out.
Allan Teger’s 1980 book, Too Much Invested to Quit, explores the psychology of such situations, particularly as they pertain to escalating conflict. Teger’s insights reveal that we participate in TMITQ (my own abbreviation) situations, even when we recognize them for what they are. And, there are times where the tendency to do so is used against us in sales and marketing. Teger admits falling prey to the temptation to invest too much even during his study of particular instances where he knew he was being targeted by TMITQ tactics. It is a powerful psychological paradigm.
The most intriguing part of the book is the $1.00 auction game, which was developed to reveal the TMITQ paradigm in a setting where psychologists could study it behavior.
The game consists of an auction in which a dollar bill is offered for sale. As in all auctions, the person with the highest bid pays his/her last bid and receives the prize, in this case the dollar. The auction proceeds as a normal auction except for one additional rule. The second highest bidder is required to pay his/her last bid, although the second highest bidder receives no prize….The two highest bidders are both reluctant to quit the auction once they have made bids, for that would mean the loss of all previous investments. Once the bidding reaches one dollar, the parties are bidding on the dollar to win a dollar. From that point on, neither bidder can make a profit, even if they win….Now the contest is to see which party will lose the least.(p. 12f)
In the majority of cases, the dollar sells for more than $1, in some instances going for as much as $20. The book analyzes motives for starting a bid and for continuing to bid. Several chapters examine group studies and statistics about participation in the dollar bill auction. The later chapters will be more important to psychologists interested in the empirical data behind the study.
The book makes my bucket list of books because it revealed to me the TMITQ paradigm. Many times across the years, from repairing a car, to reading a book, to personnel administration, I have made decisions based on the self awareness this book allowed. The background knowledge forced me to decide if I was making a good decision or just following a default path toward more and deeper investments in a losing situation. The book has no formulas for making these decisions, it simply allows individuals to see a TMITQ situation for what it is, instead of blindly following the present course of action.
This book has been long out of print. I have seen copies advertised on the internet for upwards of $100, indicating its insightfulness. The typeface is dated and hard to read by current standards. Obviously, some details are out of date, such as the attractiveness of winning $1 in an auction. Experimenters may want to try $10 or $20 bills to achieve the same participation today.
If you run a business, manage personnel, read a bad book or engage in conflict, having read Too Much Invested to Quit, will encourage you to make a conscious decision about future actions, instead of rushing headlong toward potentially greater losses. I would encourage those who write government policy (on both sides the aisle) to read this book.