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 that is no longer relevant to decisions about the future. Even though economists argue that sunk costs are no longer relevant to future rational decision-making, people in everyday life often take previous expenditures in situations, such as repairing a car or house, into their future decisions regarding those properties.

^ Mankiw, N. Gregory (2009). Principles of Microeconomics (5th ed.). Mason, OH: Cengage Learning. pp. 296–297. ISBN 978-1-111-80697-2.
^ Mankiw, N. Gregory (2018). Principles of Economics (8th ed.). Boston, MA: Cengage Learning. pp. 274–276. ISBN 978-1-305-58512-6.
^ Warnacut, Joyce I. (2017). The Monetary Value of Time: Why Traditional Accounting Systems Make Customers Wait. Taylor & Francis. ISBN 978-1-4987-4967-1.

[mankiw2009-1] Mankiw, N. Gregory (2009). Principles of Microeconomics (5th ed.). Mason, OH: Cengage Learning. pp. 296–297. ISBN 978-1-111-80697-2.

[mankiw2018-2] Mankiw, N. Gregory (2018). Principles of Economics (8th ed.). Boston, MA: Cengage Learning. pp. 274–276. ISBN 978-1-305-58512-6.

[Warnacut2017-3] Warnacut, Joyce I. (2017). The Monetary Value of Time: Why Traditional Accounting Systems Make Customers Wait. Taylor & Francis. ISBN 978-1-4987-4967-1.

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