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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Throwing good money after bad: the effect of sunk costs on the decision to escalate commitment to an ongoing project.
The results revealed that the more people typically focused on the present moment, the more they reported that they would ignore sunk costs.
In the light of the contestability contribution, antitrust policy was supposed to focus on barriers to entry; with the key aspect of sunk costs that could restrain potential entrants.
Equation (1) illustrates the profit function considered by a potential entrant at a point in time, where (Payment- Variable Costs) represents a stream of discounted per patient variable profits, Quantity is the expected number of patients, Fixed Costs represents discounted ongoing fixed costs, and Sunk Costs are initial sunk costs of entry.
The excessive costs of completing the reactors far exceed the sunk costs at present, which means they should be cancelled.
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.
The fresh-faced coed who struggled mightily with her one required economics class would undoubtedly be astonished to find that, 30 years later, she spends a considerable amount of time pondering sunk costs and legacy infrastructure.
However, those are now sunk costs and we cannot undo them.
Accepted methodology in the field of appraisal, aka valuation, imbues the microeconomic theory of sunk costs.
The distinction between fixed and sunk costs is a one of the most important concepts in production theory and one of the most likely to frustrate students.
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.
Secondary issues examined include opportunity costs, sunk costs, the use of progressive levels of critical thinking skills, the application of classroom knowledge to real life situations, and effective communication skills.