Palestine and the Fallacy of the Human Sunk Costs Theory

Sunk costs are, in economics, costs that cannot be recovered once they’ve been incurred, regardless of what one does afterwards (as opposed to variable costs).

A good textbook example is a non-refundable plane ticket. If you’ve already bought a non-refundable plane ticket, you can’t get your money back, even if you decide not to go.

People would tend, however, to want to go, so as ‘not to waste the ticket’. This is the fallacy of sunk costs: because you’ve already paid for the ticket regardless. So this money should not be part of your decision process anymore.

Of course, if you haven’t bought it yet, it should still be part of your decision process! Then you’d be arguing whether to pay what remains an avoidable fixed cost, still unpaid.

Of course, we all fall into the trap often. “Might as well, I’ve already paid for it” - how many times have you used this sentence?

The Palestinians, however, don’t fall for the fallacy: they do it voluntarily.

Let me explain.

Israel is constantly increasing the Palestinian death toll. Those dead, logically, can be considered as sunk costs: they are non-recoverable.

By pure economic logic, those dead must not be part of any future resistance/negotiation decision by the Palestinians.

Israel’s logic is economically infallible. The idea is simple: you’ve lost all those people already. Put them in the past. Now if you want to avoid more killed - those avoidable fixed costs - you need to play nice. Yalla, bend over.

In fact, an outside observer might agree. By throwing in terms like ‘cycle of violence’ and ‘perpetuating their own misery’, our friendly outsider may agree that Palestinians are essentially ‘bringing it upon themselves’ because ‘they can’t seem to understand that they will be hit even harder if they continue’.

This is where he’d be wrong.

Because the Israeli army isn’t Expedia.com and you don’t ‘tick the box’ where you agree on their rules of engagement. Because the 195 murdered today in Gaza are not comparable to 195 dollars paid on theatre tickets.

Nor are the other 4900 killed since the beginning of the Intifada, which is yet to come to an end.

You cannot quantify pain, humiliation, occupation. The cost was never sunk to begin with. The wound still bleeds, a day, a year, sixty years after.

Israel is playing the wrong game. Whether they genuinely don’t realise, or do and pretend not to notice, it is going to blow up in their faces eventually.

Because here, another theory will be at play - an old bit of wisdom really: “Fear he who has nothing to lose”. Battered, starved, bombed, widowed, orphaned: the Palestinians are dangerously close to that.