sunk cost


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sunk cost

Managed care
Costs in equipment, reagents and dedicated supplies that have already been incurred, which are not included in future budget or financial considerations. Sunk costs are typically lost when a technology becomes obsolete.

Psychology
A metaphorical term for the regret of having made a particular choice that resulted in a lost opportunity.
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Huge investment in sunk cost by big pharmacies and government resulting in reduction of clinical trial duration is also likely to push the demand for this market in future.
Many prior operant sunk cost analogs have actually demonstrated escalation (i.
In one online study, participants reported about how much they typically focus on the present moment and also read 10 sunk-cost and then reported how much they would let go of sunk costs in each of them.
In some cases, a significant increase in the current market value would eliminate sunk cost completely and turn losses into profits.
When we calibrate the model considering a share of sunk costs of 28% consistent with the empirical estimate of a small or a nearly neutral effect of training costs on the starting wage, the model is able to reproduce 96% of the observed volatility in the U.
A sunk cost is a fixed cost that cannot be avoided while an avoidable fixed cost is a fixed cost that can be avoided.
Later academic work, however, pointed out that a market devoid of any sunk costs is rare and paved the way for a long debate over the theoretical contribution of contestability theory and its applicability in deregulation efforts.
HAUSMAN (1999, 2002) has applied the real options methodology to examine the sunk cost of assets and the delay option in the context of unbundled network elements (UNEs).
Unfortunately, many of even the best and most successful executives lack the objectivity and personal distance to recognize a sunk cost.
Consumers perceive larger sunk cost including money, time, and effort when they have spent more money (Soman and Gourville 2001).
There are two other topics I would like to discuss in relation to silver bullets: change and the sunk cost fallacy.
The sunk cost effect is typically understood as an irrational economic judgment, because prior investments have inappropriately influenced the present decision.