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Topic: Sunk cost

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	Sunk cost - Wikipedia, the free encyclopedia
		Sunk costs are sometimes contrasted with variable costs, which are the costs that will change due to the proposed course of action.
		In this case, your sunk cost with respect to the car at any given time is the difference between how much you originally paid and how much you could sell it for now.
		The sunk cost fallacy is also sometimes known as the "Concorde Effect", referring to the fact that the British and French government continued to fund the joint development of Concorde even after it became apparent that there was no longer an economic case for the aircraft.
	en.wikipedia.org /wiki/Sunk_cost (880 words)

	Encyclopedia: Sunk cost
		Opportunity cost (also called "economic cost") is the value of the best alternative that was not chosen in order to pursue the current endeavour--i.e., what could have been accomplished with the resources expended in the undertaking.
		Sunk costs are costs that have already been incurred and which cannot be recovered to any significant degree.
		A psychic cost is a subset of social costs that specifically represent the costs of added stress or losses to quality of life.
	www.nationmaster.com /encyclopedia/Sunk-cost (1417 words)

	Quasi-rent - Wikipedia, the free encyclopedia
		Many capital investments take the form of sunk cost investments in more or less highly specialized capital equipment, research and development, or training.
		For sunk cost investments, once the investment has been made, the cost of drawing the result into economic use may be minimal.
		In the absence of patents and other intellectual property law, the sunk cost investment in research behind an invention could only earn a quasi-rent to the extent that secrecy inhibited competitors from freely utilizing the results of the research.
	en.wikipedia.org /wiki/Quasi-rent (501 words)

	Sunk cost (Site not responding. Last check: 2007-10-06)
		In economics and in business decision-making, sunk costs are costs that have already been incurred and which cannot be recovered to any significantdegree.
		Sunk costs are sometimes contrasted with incremental costs, which are the costs that will change due to the proposedcourse of action.
		In this case, your sunk cost withrespect to the car at any given time is the difference between how much you originally paid and how much you could sell it fornow.
	www.therfcc.org /sunk-cost-19222.html (630 words)

	[No title]
		Sunk and Opportunity Costs Questions: Contrast sunk costs and opportunity costs and explain which is relevant to decision making.
		Sunk Costs Sunk Costs are costs that were incurred in the past.
		The $2000 per unit attributed to the cost of the machine is a sunk cost and irrelevant.
	faculty.citadel.edu /woolsey/micro/sunk.doc (859 words)

	Econ 310
		Historical cost indicates market conditions at time of purchase, and is used in tax analysis, while current cost, which reflects current market conditions, is more relevant in valuation and cost analysis at the managerial level.
		Sunk costs are those parts of the purchase cost that cannot later be salvaged or modified through resale or other changes in operations.
		Fixed costs are the costs associated with the fixed inputs that define the economic short run.
	www.humboldt.edu /~microeco/cost.htm (2427 words)

	"Sunk Cost" Definition (Site not responding. Last check: 2007-10-06)
		A cost that has been incurred and cannot be reversed.
		Sunk Cost - A cost that has been incurred and cannot be reversed.
		Sunk Cost : a cost that has been incurred and cannot be reversed.
	www.level2.ru /dictionary/s/sunk_cost.html (36 words)

	[No title]
		Sunk Cost Sunk costs are contracts and decisions that are already vouched and cannot be recovered anymore.
		Compare to opportunity costs where one has a decision of giving up something in order to attain another thing, one has to live with sunk cost because they are expenses that are permanent.
		John’s fixed cost, which is the rent expense for the building can be considered a sunk cost because he signed a lease to continue on paying rent for the whole year.
	www.csun.edu /~hceco008/c8d-ax.doc (816 words)

	[No title] (Site not responding. Last check: 2007-10-06)
		Because the price of a movie ticket is a cost the patron must pay explicitly, it tends to be more noticeable than the money that she would fail to earn by seeing the movie.
		The opportunity cost of attending the next economics class meeting is the value of the next best alternative (e.g., sleeping for an additional hour, taking a different class or money that could be earned for an hour at work).
		The opportunity cost of skipping class is the value of attending the class (e.g., better grade from having been in class, or specific points associated with attendance).
	www.acsu.buffalo.edu /~chetan/181-03/ans/chap1-3.doc (7328 words)

	Sunk cost
		A sunk cost is a cost that has been incurred in the past and cannot be reversed now.
		The purchase of the original building is a sunk cost and is irrelevant in the school?s decision to purchase the new building.
		The cost of the original building does not influence the school long-run decision concerning the number of class rooms and it does not influence the school's short-run decisions concerning how many teachers to hire and how many students to enrol.
	www.economicsplace.com /econ5e/glossary/sunkcost.html (145 words)

	Sunk Cost (Site not responding. Last check: 2007-10-06)
		The Cost of an airline seat is primarily fixed and sunk (as long as...
		SUNK COST - In economics, a sunk cost is a cost that has already been incurred, and therefore cannot be avoided by any strategy going forward.
		Sunk costs are costs that have already been incurred and therefore will be the same no matter which alternative a manager selects.
	www.rent-seeking.info /info/Sunk-Cost (292 words)

	Ecology and Society: Overexploitation of renewable resources by ancient societies and the role of sunk-cost effects
		Because higher draft picks cost the team more money, both their greater playing time and their enhanced career longevity are examples of the influence of high sunk costs.
		The simplification of the complex society was implemented by removing the structure of ranks and honours, simplifying the civil administration, reducing governmental transaction costs, and cutting the costs of the army.
		Sunk costs and the natural resource extraction sector: analytical models and historical examples of hysteresis and strategic behavior in the Americas.
	www.ecologyandsociety.org /vol9/iss1/art6/main.html (6643 words)

	[No title]
		The opportunity cost of gasoline here is the same for both cars as it will cost you the same amount (the new, higher gas price) to replace the gasoline you use from either car.
		The decision should be based on costs he can still influence (standing in line for another 5 minutes) and the benefits associated with it (20 minutes of skiing).
		Despite the increase in costs from increasing output per year from 10 to 12 (since the firm suffers from decreasing returns to scale), the average cost will decrease on net because of the strong learning effect.
	faculty.insead.edu /suslow/Homeworks/ans8-14.doc (990 words)

	Sunk Costs
		C in making the case for the economist=s doctrine about sunk costs is, however, often thought to be a complete theory of rationality so far as it pertains to the selection of actions, specifically, to what it is rational to do, given certain information and objectives.
		Generalizing, for any case in which a sunk cost has been incurred, we can construct a parallel case in which preferences, assets and expectations are precisely the same, but no sunk cost has been incurred.
		In the future, I shall refer to the position that sunk costs should never be honored or taken into account in decision making as >the economist=s doctrine= because economists, more than other decision theorists, have typically seen no rational place for attending to sunk costs.
	personal.bgsu.edu /~roberth/sunkost.html (4872 words)

	Understanding the Sunk Cost Effect: An Experimental Approach (Site not responding. Last check: 2007-10-06)
		The purpose of this project is to examine the relevance of sunk costs in decision-making.
		Explicitly or implicitly, surveys and experiments on sunk costs necessarily share (at least) three common elements: (i) the sunk cost, (ii) an initial endowment (or budget), and (iii) the marginal cost and benefit of escalation (i.e.
		It is suggested that as the marginal cost of continuing an investment increases the likelihood that participants will display the sunk cost effect will fall.
	www.nyu.edu /econ/dept/esa/elliot.htm (317 words)

	Economics 101
		Opportunity cost is an important concept to keep in mind when contemplating important financial decisions for your co-op.
		All we mean is that it is important to consider the cost of not doing things at the same time that you consider the costs of doing them.
		A related concept worth highlighting is that of the "sunk cost." Let's say you just blew $10,000 on a market study for a new site, and the study came out lukewarm on all your favorite sites.
	www.cooperativegrocer.coop /cg1998/economics101.shtml (527 words)

	Sunk Costs Definition. Define Sunk Costs. What is Sunk Costs?
		Other fixed costs, that are not sunk (rent, depreciation on equipment etc.) should be factored in when making pricing decisions in the future, since these are ongoing costs to the company.
		Another example of a sunk cost is the cost of a seat on an airplane to the airline.
		The Cost of an airline seat is primarily fixed and sunk (as long as one assumes the flight was going to take place regardless of whether the seat was sold) with a small portion attributed to variable costs if one considers the food and beverage service.
	www.learnthat.com /define/view.asp?id=337 (452 words)

	Lynn Tallman - UF Journal of Undergraduate Research Paper
		According to traditional economic theory, decisions should be based only on the incremental costs and benefits that are expected to arise from an option because sunk costs cannot be recovered.
		Considering sunk costs while evaluating current options might cause a person to make an irrational decision; and yet, people often honor sunk costs, perhaps because they do not want to feel that they have wasted the already-spent investment.
		For sunk cost scenarios, one version had no sunk cost present in the decision problem while the other version included a sunk cost in the information.
	www.clas.ufl.edu /jur/200410/papers/paper_tallman.html (2603 words)

	The Sunk-Cost Fallacy - Bush falls victim to a bad new argument for the Iraq war. By Barry Schwartz
		The "sunk costs" are sunk whatever your decision; only the future matters.
		The fallacy in thinking about sunk costs is precisely that people feel compelled to get their "money's worth," even if it makes them suffer.
		To acknowledge sunk costs and change course need not be an admission of foolishness or even failure.
	www.slate.com /id/2125910/fr/rss (1086 words)

	Expert Project Management - Choosing the Wrong Portfolio of Projects: Part 1
		We know rationally that sunk costs -- past investments that are now irrecoverable -- are irrelevant to decision making.
		The Concorde is often cited as an example of sunk cost bias.
		Be alert to sunk cost bias in the decisions and recommendations made by others.
	www.maxwideman.com /guests/portfolio/sunkcost.htm (334 words)

	Sunk cost : Sunk costs (Site not responding. Last check: 2007-10-06)
		In economics, sunk costs are costs that have already been incurred, and which cannot be recovered to any significant degree.
		An example of a sunk cost for a business is marketing, more specifically, promotion of a brand name.
		This incurs costs that cannot normally be recovered; it isn't typically possible to later "demote" one's brand names in exchange for cash.
	www.termsdefined.net /su/sunk-costs.html (605 words)

	Resistance to DeMause's Findings: Sunk Cost of Historical Interpretations That Omit Human Love by James C. Duffy
		To understand the notion of sunk costs, consider that when one pursues a goal and the pursuit is frustrated as one gradually comes to learn that one cannot really reach the goal, there are useless costs that already have been incurred along the way in what now looks to be a futile pursuit.
		The lost, stranded, or sunk costs in pursuing a goal that now comes into focus as practically impossible to attain are a powerful image that can irrationally sustain still more futile motivation to persist in pursuit of a lost cause.
		If one has to face the reality of sunk costs in pursuit of an acquisitive goal, the irrationality and suffering from disappointment is not so severe as when having to face the sunk cost of pursuing a maintenance goal.
	primal-page.com /duffy1.htm (2275 words)

	thorninpaw: The Sunk Cost Fallacy
		Eighteen years later, the unit cost is almost $300 million, and the plane is not yet in service.
		In so doing, it explicitly invoked the sunk cost argument, which was doubly fallacious because not only was it unrelated to potential dividends in a changed strategic environment, but it lowballed future development and production costs, thereby making the argument even more skewed.
		Fortunately for our governing class, the sunk cost argument lies ready: "We've come this far; there's no turning back." Taxpayers have committed $121 billion and military families a much heavier cost, but the U.S. government has not accomplished a single major prewar objective save deposing the senile Saddam Hussein.
	www.thorninpaw.com /mt/archives/000459.html (1060 words)

	MTW44.HTM, COSTS: Fixed, Variable, Direct, Indirect, Incremental, Marginal, Sunk
		Fixed costs are at any time the inevitable costs that must be paid regardless of the level of output and of the resources used.
		They are usually considered linear because the unit cost is computed by dividing the total other costs for a period or event by the amount of activity in the period.
		Life Cycle Costs are the total cost to an organization for acquisition and ownership of a product or asset over the life of the asset.
	www.unb.ca /web/transpo/mynet/mtw44.htm (858 words)

	Errors and Bias in Judgment
		The Concorde supersonic airplane is often cited as an example of sunk cost bias.
		Psychologists postulate that it is because we are unwilling, consciously or unconsciously, to admit to a mistake.
		For example, project managers who are anxious to be perceived as successful may pad cost and schedule estimates to reduce the likelihood that they fail to achieve expectations.
	www.prioritysystem.com /reasons1.html (4440 words)

	Dispatches From the Moderate Left: The Sunk-Cost Fallacy Fallacy
		Taking into account sunk costs gives us incentives to be careful with what we buy and coding different moneys in different accounts can be a good shorthand way of managing our complicated financial affairs, even if it isn't optimal.
		I've argued before that a short-term withdrawal is a really bad idea but if circumstances change or when the time comes for withdrawal, even under fire, the fact that there is an enormous sunk cost in the war should have only a minimal impact on the decision.
		The Sunk cost argument is a faceless argument in regards to public matters.
	modleft.blogspot.com /2005/09/sunk-cost-fallacy-fallacy.html (1404 words)

	The sunk cost effect in pigeons and humans. (Site not responding. Last check: 2007-10-06)
		The sunk cost effect in pigeons and humans.
		The sunk cost effect is the increased tendency to persist in an endeavor once an investment of money, effort, or time has been made.
		We developed a behavior-analytic model of the sunk cost effect to explore the potential for this behavior in pigeons as well as in humans.
	seab.envmed.rochester.edu /abstracts/JeabAbstracts/83/_83-001.Htm (329 words)

	Sunk cost - InfoSearchPoint.com (Site not responding. Last check: 2007-10-06)
		For example, when you pre-order a movie ticket, the price of the ticket becomes a sunk cost; even if you later decide that you'd rather not go to the movie, the odds that you would be able to resell your ticket are essentially zero.
		Thus, there is no way to get back the money you originally paid and you have a sunk cost on your hands.
		An common example of a sunk cost for a business is the promotion of a brand name.
	www.infosearchpoint.com /display/Sunk_cost (554 words)

	Sunk Cost
		The flip side of the sunk cost fallacy is that you shouldn't change course just because you initially made a mistake.
		Well, that's a sunk cost that if we're not getting any return on, that's an issue for me and it should be for the taxpayers as well.
		In a statement, the company said the entire seed capital of RM3bil to establish Danaharta was expected to be a sunk cost; however, after retiring all...
	finance.za-news.com /new/Sunk_Cost.html (295 words)

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