You can get a better salary if you keep a check on sunk-cost fallacy | How sunk-cost fallacy earns you less during salary negotiations?

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You can get a better salary if you keep a check on sunk-cost fallacy | How sunk-cost fallacy earns you less during salary negotiations?

The sunk cost fallacy is a cognitive bias in which individuals make decisions based on the amount of resources they have already invested into a particular project or situation, rather than considering the potential outcomes of different options.

This bias can lead to irrational decision-making, as individuals may continue to invest resources into a project or situation even when it is no longer in their best interest to do so.

One area in which the sunk cost fallacy can have significant consequences is salary negotiation during job interviews.
Individuals who have invested a significant amount of time and effort in the job application process may be more likely to accept a lower salary offer than they otherwise would, to justify the resources they have already invested.

For example, an individual who has spent several months preparing for a job interview, researching the company and the position, and networking with individuals in the industry, may be more likely to accept a lower salary offer than they would if they had not invested so much time and effort into the process.

Similarly, an individual who has been unemployed for a long period may be more likely to accept a lower salary offer than they would if they had other job options available.

This bias can be particularly problematic for individuals who are already at a disadvantage in the job market, such as women and people of color, as they may be more likely to accept lower salary offers than their white, male counterparts. Additionally, this bias can lead to a self-fulfilling cycle, as individuals who accept lower salary offers may be less likely to negotiate for higher salaries in the future.

How to avoid the sunk-cost fallacy during a salary negotiation?
To avoid the sunk cost fallacy during a salary negotiation, it is important for individuals to focus on the potential outcomes of different options, rather than the resources they have already invested. This can involve setting clear salary expectations before the interview, researching the company and the position, and networking with individuals in the industry. Additionally, individuals should be prepared to walk away from an offer if it does not meet their expectations.

In addition, it is important for individuals to be aware of the sunk cost fallacy and to be mindful of the potential impact it can have on their decision-making. By being aware of this bias, individuals can take steps to mitigate its effects and make more rational decisions during salary negotiation.

Conclusion:
In conclusion, the sunk cost fallacy is a cognitive bias that can have significant consequences in salary negotiation during job interviews. By being aware of this bias and taking steps to mitigate its effects, individuals can make more rational decisions during the negotiation process and increase the chances of securing a salary that is fair and reflective of their skills and qualifications.

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