Search results
Results from the Think 24/7 Content Network
Sunk cost. In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. [1] [2] Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. [3] In other words, a sunk cost is a sum paid in the past ...
From the traceability source of costs, sunk costs can be direct costs or indirect costs. If the sunk cost can be summarized as a single component, it is a direct cost; if it is caused by several products or departments, it is an indirect cost. Analyzing from the composition of costs, sunk costs can be either fixed costs or variable costs.
Escalation of commitment. Escalation of commitment is a human behavior pattern in which an individual or group facing increasingly negative outcomes from a decision, action, or investment nevertheless continue the behavior instead of altering course. The actor maintains behaviors that are irrational, but align with previous decisions and actions.
Alamy There are some economic terms most of us know and understand, such as supply and demand. And there are other terms we will probably never even run across, like implicit logrolling and a ...
To mitigate cognitive biases, such as the sunk-cost bias, educators must raise students' awareness of these common judgment errors. In this article, the author proposes a classroom activity that actively engages students and allows them to identify this bias in their own judgments.
Some costs that require firm to comply in order to exit market. For example, remediation costs due to environmental regulations. High fixed exit costs. "can include loans, which the company pays back over time, property costs, vehicle costs or any settlement packages for investors or employees." Indirect opportunity costs of exit: Sunk costs.
2007. The rising costs and debt loads associated with four-year institutions have subsequently decreased the opportunity cost of attending community college. That is, achieving higher wages by attending a four-year school is growing less profitable as a student is required to pay more out-of-pocket, take on more debt, and forgo years of employment.
Fixed and Sunk Costs Revisited. Wang, X. Henry; Yang, Bill Z. Journal of Economic Education, v32 n2 p178-85 Spr 2001. Attempts to clarify the concepts of, and the link between, fixed costs and sunk costs. Argues that the root of confusion is the inconsistency in defining the term fixed costs. Consistently defines fixed and sunk costs, and ...