Quit: The Power of Knowing When to Walk Away

by Annie Duke

Cohen has wondered this herself, coming to no clear answer. She just couldn’t bring herself to retire, which she considered “too permanent and too final. It would end an identity. . . . I think I had to get to the point that I was so unhappy that I wasn’t functional.”

In large part, we are what we do, and our identity is closely connected with whatever we’re focused on, including our careers, relationships, projects, and hobbies. When we quit any of those things, we have to deal with the prospect of quitting part of our identity. And that is painful.

You Own What You’ve Bought and What You’ve Thought: Endowment and Status Quo Bias

When we own something, we value it more highly than an identical item that we do not own.

Richard Thaler was the first to name this cognitive illusion, calling it the endowment effect. In fact, he introduced the endowment effect in that same 1980 paper where he coined the term “sunk cost.” He described the endowment effect as “the fact that people often demand more to give up an object than they would be willing to pay to acquire it.”

Thaler hypothesized that it had something to do with the wines being in his possession, the fact of ownership. That ownership caused him to value his bottles more highly than bottles not in his possession.

If you got the mug, your minimum selling price was at least double the maximum price someone getting the cash would pay to buy it.

The endowment effect has obvious applications to quitting behavior. Selling something you own is the equivalent of quitting; you are quitting your ownership. Not selling something you own is a form of persistence. When you are deciding whether to sell your wine, or your car, or your house, you are choosing whether or not to persist in owning those things.

Decades of research since have established that we can become endowed to things for additional reasons other than loss aversion. In the process, a broader understanding of what we think we own has been developed. The original work on the endowment effect was about the physical ownership of objects and the additional value we impute to those objects once they are in our possession. But as Carey Morewedge and Colleen Giblin pointed out in a 2015 review of the literature, we can become endowed to much more than physical objects. As the research on the endowment effect has expanded, it has become increasingly clear that we can also become endowed to our beliefs, our ideas, and our decisions. As we carry around beliefs and ideas, they become our possessions. We own what we’ve bought and what we’ve thought.

When he was at the point where he had already decided to scale back his commitment to Flow, he nevertheless turned down an offer to sell it for $6 million, because that wouldn’t allow him to recoup all of his $11 million in losses.

The endowment effect adds more mass to the katamari, beyond what is already added by the sunk cost effect.

The NBA and other professional sports leagues offer a unique environment in which to study quitting behavior. Decision-makers in pro sports get a lot of continuous, quick, clear feedback on player productivity. Pro basketball is a data-rich environment, with many objective measures of player performance for scoring (points, field goal percentage, free throw percentage), toughness (rebounds and blocks), and quickness (assists and steals). The coach and team management are highly motivated to use the best players in the right situations and, obviously, to win.

To find out, they analyzed the draft order of the 1980–1986 NBA drafts, nine measures of player performance, minutes of playing time for five seasons, career length, and whether a player was traded. It turned out that draft order did have an independent effect on future playing time and roster decisions. “Results showed that teams granted more playing time to their most highly drafted players and retained them longer, even after controlling for players’ on-court performance, injuries, trade status, and position played.”

If we can see this escalation of commitment even in a data-rich, high-stakes environment where you can actively measure the quality of the player, it shouldn’t be surprising that employers hang on to their employees too long. Or that students demand much more than their coffee mug is worth to trade it. Or that an economics professor won’t sell his bottles of wine at a price he also won’t buy one for.

To anybody who thinks they can be objective about quitting decisions, the results of the field studies in major professional sports should be super alarming. You’ve got smart people, a data-rich environment, a tight feedback loop, and a lot of motivation. For most of the quitting decisions we make, we have much less information and we have longer, noisier feedback loops.

The Status Quo Is Hard to Quit

Status quo bias adds to the mix of cognitive forces gaffing the scale.

the status quo is the path you’re already on or the way you’ve always done things. The bias is that we have a preference to stick with those decisions, methods, and paths that we’ve already set upon, and a resistance to veering from them into something new or different.

They presented both lab experiments and field studies demonstrating that individuals overwhelmingly stick with the status quo option, even when that option is associated with a lower expected value. The bias is widely acknowledged, robust, and has been established as applying to decisions by individuals and organizations.

We are much more bothered by the downside potential of changing course than we are by the downside potential of staying on the path we’re already on.

she wasn’t nearly as averse to the prospect of the same bad outcome—unhappiness—from staying in her current job, even though she had already acknowledged that unhappiness was a 100% certainty if she didn’t quit. She was thinking about the potential losses associated with each path in an asymmetric way.

Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”

Failing conventionally doesn’t feel as bad, nor is it treated as such by the people who are judging you.

with quitting decisions is that we do not think of sticking with the status quo as an active decision in the same way that we view switching as one. We are much more concerned with errors of commission than errors of omission (failures to act). We’re more wary of “causing” a bad outcome by acting than “letting it happen” through inaction. This phenomenon is known as omission-commission bias.

One of the steps to becoming a better quitter is to not accept “I’m not ready to make a decision right now” as a sentence that makes sense. At every moment of your life, you have a choice about whether to stay or whether to go. When you choose to stay, you are also choosing to not go. When you choose to quit, you are also choosing to not continue. It’s crucial to start realizing that those are the same, active decisions.

When I asked her whether she was happy in her current position, she easily answered. It was already a known quantity, and she knew she was unhappy. But when I asked whether she would be happy in the new job, she said she didn’t know, an expression of uncertainty about what might lie ahead if she switched, because she had never experienced being in that position. That uncertainty contributed to her fear of quitting.

One of the most visible examples is how remarkably slow NBA teams have been to take advantage of the benefit of three-point shots. Many people have documented this, including Michael Mauboussin and Dan Callahan in a September 2021 paper about overcoming barriers to change in sports and business.[*]

One of the early mistakes teams made was in thinking about the math wrong. Teams were comparing the value of three-point shots versus (all) two-point shots, rather than the value of three-point shots versus two-point shots that are taken just inside the three-point line. The disparity in expected value really grows when you look at the choice that players actually have to make, which is between a perimeter two-pointer or a slightly longer three-point attempt. The answer to that comparison is clear and was clear within a decade of the league’s adoption of the rule: Getting three points instead of two (a 50% increase) is worth far more than the few percentage points of difference in accuracy between the two shots. The math was figured out by the early nineties. But, stunningly, it wasn’t until the 2014–2015 season that three-point attempts on a league-wide basis started exceeding two-point attempts.

some of the other well-known and documented failing strategies that pro sports teams were slow to quit: always punting on fourth down in the NFL (instead of going for it); always attempting extra-point kicks after touchdowns (rather than two-point conversions); MLB teams positioning infielders in the traditional spots (rather than shifting); MLB teams bunting and stealing bases as an offensive strategy; NHL teams’ reluctance to pull their goalie earlier or when facing smaller deficits. There are huge rewards in professional sports for innovating (or just following successful innovators). The innovators and rapid adopters have excelled, like the Oakland A’s and the Tampa Bay Rays in baseball and the Houston Rockets in basketball, producing consistently winning teams with historically low payrolls. In football, the New England Patriots have built a two-decade dynasty without the benefit of those coveted top draft choices.

The Hardest Thing to Quit Is Who You Are: Identity and Dissonance

Sears continued to grow rapidly over the next decade and a half, until the 1920s presented a number of challenges to its business model: the mobility created by the automobile, greater competition, an agricultural depression, and a demographic shift into cities. Sears responded by pivoting within its consumer business from catalog sales to retail stores.

Adults ask children, “What do you want to be when you grow up?” We don’t ask, “What job do you want?” We are asking who they will be, not what they will do. This is a difference with quite a large distinction.

Be picky about what you stick to. Persevere in the things that matter, that bring you happiness, and that move you toward your goals. Quit everything else, to free up those resources so you can pursue your goals and stop sticking to things that slow you down.

Find Someone Who Loves You but Doesn’t Care about Hurt Feelings

He sums up his philosophy in three words: Life’s too short.

What Conway recognizes is that we all have a limited time on this planet to devote to different opportunities we might pursue.

Obviously, the chance to change the world and the outsized rewards that come with succeeding can make it worthwhile for them to persevere. But in Conway’s thinking, life’s too short to take on all that suffering once it’s clear that the probability is too high that those things are out of reach.

He considers it his duty to help these founders understand the futility of persevering, so these brilliant people can move on to more worthwhile opportunities.

The deftness of Conway’s approach is that he’s able to take founders who are facing down the decision, who are less rational because they’re in it, and refocus their attention on some point in the future. That refocus allows the founder to be more rational about the choice.

“What everybody needs is the friend who really loves them but does not care much about hurt feelings in the moment.”

We all need someone who loves us but who also understands that it’s better for our long-term happiness to speak out loud the unpleasant truth when the path we are on is one we need to abandon.

Wouldn’t it be so much better if you could just take over and make the decision for them, especially since the person who’s least equipped to make a rational decision about quitting is the person facing down that choice?

I suppose one lesson from Staw’s data is that if you have a business that’s gotten a loan and you’re now in financial trouble, you should go back to the same person who originally lent you the money. You’re much more likely to get it.

Have the people who make the decisions to start things be different from the people who make the decisions to stop those things.

Have the committee approving what to buy be different from the committee approving what and when to sell. Of course, that’s only practical when the team is large enough.

whenever you’re pursuing a goal, there are always other opportunities you’re neglecting. You simply don’t see them because you’re not looking for them. Having quit, she was once again in a position of having to figure out what to do next.

Sometimes, forced quitting gets you to explore new opportunities, like when Maya discovered her love of cognitive science. And sometimes, being forced to quit gets you to see options that have been right under your nose all along in a new light. That’s what happened to me with poker.

We humans, unfortunately, often don’t explore until we’re forced to.

To understand the boldness of this decision, you have to realize that no other Division I coach was doing this. This was at the end of 2013, long before the language of self-care became part of the zeitgeist.

Coach Neighbors’s teams didn’t become less competitive or start winning less because of the extra day off. They started winning more. And that extra day off didn’t just give them more wins on the court. That extra day gave those players time and space to explore other opportunities and interests that they wouldn’t have been able to explore if they had to be on the court for that extra day of practice. They used that day in ways that benefited them long after their college basketball careers. It’s amazing what you can accomplish in just one day.