Sunken Costs - Do they affect your school choice?

Question

Figured I'd pick people's brains on this.

With deposit deadlines coming up and a lot of schools keeping people on waitlists, it seems like a very real possibility that a bunch of us will be in the following position:

School A accepts you, and wants a say $2K deposit by mid-April
School B waitlists you, but is a little more desirable for you than School A

Not taking chances you pay the deposit in April for School A, and lo and behold come June you are admitted off the WL to school B. Would you instantly change course to school B, money be damned, or could the fact that youve already invested $$ into school A make a difference if the schools aren't that different?

As of now my gut still says School B. After all its only about 1-5% of your total MBA cost and if there's one cardinal rule I learned from playing poker, lots of bad decisions can be made from the 'well I already invested in this, can't turn back now' angle. But I still have yet to fork over a deposit!

What do others think? What if you've paid more than just a couple Gs?

isa · Answer

I'm in this spot

I'm going to be paying the deposit for a school fairly soon, and then if I get off the waitlist for my top choice, I will most likely be going there. That's assuming that neither school gives me significant financial aid. I figure in the grand scheme of things, I'm willing to pay an extra 1k to go to my top choice school.

falibay · Answer

Bostonsparky, I think the 1-3K is not relevant in the grand scheme. Duke vs Wharton for 2K ? No brainer

I don't think that the sunk cost should affect your decision. I look the deposit as an option you have on the school, you can exercise it if you want to go there but if there is another school you would like to attend , you let it expire and go to the other school.

natuago91 · Answer

Say in additional to the deposit you didn’t find out from your waitlist school until July and you had already put in a deposit for your new apartment. Now we’re talking about deposit plus backing out of an apartment contract you haven’t even lived in (not sure how much the penalty would be 1-2 month rent?) or say if you get in even later- August and you’re ready to move into the new apartment when your top choice lets you know- what would you do? Go to top choice and scramble to find a place to live at the last minute?

isa · Answer

I think it depends

How much is that top choice school worth to you? Are you willing to pay that extra 5k for it? If so, yes - go for the top choice. If you aren't, and you think it's really a wash between the school you were admitted to and the top choice, then perhaps it's not worth it. I think the scenario you described is really a personal choice!

rigger · Answer

Are there any ethical issues surrounding this?

falibay · Answer

I really don't think so, especially when it is not done two months before school starts. The school keeps the money and they have people on the wait list so they are not losing much

prophet · Answer

It's tough to think about walking away from hard-earned money that you've paid because it feels like you're wasting that money. But, for sake of making the logical decision, another way of thinking about it is, imagine you're at the beginning of the admissions process and you haven't paid anything yet. You have an offer from Duke with 2k scholarship versus Wharton with no scholarship - which would you take?

Sunken Costs - Do they affect your school choice?

Would paying a deposit (<$3000 US) affect where you ultimately end up in Fall 09?

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