# Optimal Quitting  URL:: https://mag.uchicago.edu/economics-business/optimal-quitting Author:: The University of Chicago Magazine ## Highlights > often we don’t stop to consider opportunity cost until both options come into our field of vision, a phenomenon demonstrated by a body of influential psychological research showing that our judgments and preferences tend to be based primarily on information that is explicitly presented. When we make decisions we tend to apply mental shortcuts, or heuristics, that allow us to think fast, which means there is no time for careful opportunity-cost thinking. Relatedly, research on affective forecasting—our ability to predict the emotions we will feel in the future—reveals that judgments about our future well-being are excessively sensitive to current mood, causing us to neglect other relevant factors. In other words, we magnify the importance of the emotions sitting in front of us, which can lead to more impulsive decision-making. ([View Highlight](https://read.readwise.io/read/01hmkg3mpky1cq7edwz13mdsx0)) > the opportunity cost isn’t always about what money can buy. When we ignore opportunity cost, we often squander that most precious limited resource of all: time. ([View Highlight](https://read.readwise.io/read/01hmkg4x1ge79p02dcy63zr88d)) > In the same way that when we spend our money on one thing we can’t spend it on another, when we spend our time on one thing we can’t spend it on another. When a company focuses all of their resources on scaling one product, they can’t scale another. When a government scales one public program, they don’t scale another. To implement such endeavors means investing not just money but also thousands of hours of time by the people involved. In this manner, as an organization scales, opportunity costs grow—more money is spent, but so is more time. And time, economically speaking, is money. ([View Highlight](https://read.readwise.io/read/01hmkg589hmp3tevdwa3rym311)) > The more time you sink into the wrong idea, the more you are misspending life’s most precious resource. But if you quit at the right time (and ignore that sunk cost), then you can move on to scale something else—something with a better shot at success. > This is what I call optimal quitting. ([View Highlight](https://read.readwise.io/read/01hmkg5mmyzpfj6f2weqjqmxtn)) --- Title: Optimal Quitting Author: The University of Chicago Magazine Tags: readwise, articles date: 2024-01-30 --- # Optimal Quitting  URL:: https://mag.uchicago.edu/economics-business/optimal-quitting Author:: The University of Chicago Magazine ## AI-Generated Summary In the book "The Voltage Effect: How to Make Good Ideas Great and Great Ideas Scale," economist John A. List explores the concept of scalability and provides advice on when to quit in order to pursue more promising opportunities. List identifies five key traits that scalable ideas possess and shares four secrets for entrepreneurs to grow their ideas successfully. He emphasizes the importance of considering opportunity costs and sunken costs when making decisions, highlighting the value of quitting unscalable pursuits in exchange for more impactful endeavors. List argues that quitting can be a virtue and that people, companies, and organizations often don't quit enough or soon enough. ## Highlights > often we don’t stop to consider opportunity cost until both options come into our field of vision, a phenomenon demonstrated by a body of influential psychological research showing that our judgments and preferences tend to be based primarily on information that is explicitly presented. When we make decisions we tend to apply mental shortcuts, or heuristics, that allow us to think fast, which means there is no time for careful opportunity-cost thinking. Relatedly, research on affective forecasting—our ability to predict the emotions we will feel in the future—reveals that judgments about our future well-being are excessively sensitive to current mood, causing us to neglect other relevant factors. In other words, we magnify the importance of the emotions sitting in front of us, which can lead to more impulsive decision-making. ([View Highlight](https://read.readwise.io/read/01hmkg3mpky1cq7edwz13mdsx0)) > the opportunity cost isn’t always about what money can buy. When we ignore opportunity cost, we often squander that most precious limited resource of all: time. ([View Highlight](https://read.readwise.io/read/01hmkg4x1ge79p02dcy63zr88d)) > In the same way that when we spend our money on one thing we can’t spend it on another, when we spend our time on one thing we can’t spend it on another. When a company focuses all of their resources on scaling one product, they can’t scale another. When a government scales one public program, they don’t scale another. To implement such endeavors means investing not just money but also thousands of hours of time by the people involved. In this manner, as an organization scales, opportunity costs grow—more money is spent, but so is more time. And time, economically speaking, is money. ([View Highlight](https://read.readwise.io/read/01hmkg589hmp3tevdwa3rym311)) > The more time you sink into the wrong idea, the more you are misspending life’s most precious resource. But if you quit at the right time (and ignore that sunk cost), then you can move on to scale something else—something with a better shot at success. > This is what I call optimal quitting. ([View Highlight](https://read.readwise.io/read/01hmkg5mmyzpfj6f2weqjqmxtn))