Sunk costs (English sunk costs) are economical costs, which already led the designation in the past to disbursements and "“sunk"” in present or future any longer to be affected not to be able - therefore. Sunk costs are an often substantial component of investments and into the traditional complete cost accounting also are normally included.

Ex post office and ex-ante-relevance

Since already (thus ex post office) realized sunk costs exist independently of which alternative a decision maker selects, they may not find and place consideration with a rational decision between action alternatives thus decision-irrelevant costs.

However the same costs are natural (thus ex ante) decision relevant cost factors, as long as they were not realized yet, but only in the future result. However yet realized costs do not represent no sunk costs, since they are still influenceable. Example: Two enterprises A and B of telecommunications compete for a national fixed net market; Offerer A has already a telephone network, while offerer B exhibits still none such net. For B the costs are for this decision relevant contrary to A, why B will leave the market with larger probability than A. Versunkene costs to become in the competition theory therefore than an important reason for the development of monopolies regarded.

Sunk costs and rational behavior

Since individuals not always when Homo act oeconomicus, sunk costs often also afterwards (ex post office) are considered, in the rational sense thus "“unjustified way"”. Thus they falsify the economically optimal decision-making process.

But such irrational decisions can be personal or socially better ("“more correctly"”) than the purely economic. This is connected not least with our value system - e.g. in the sense of the slogan the economy for humans there, did not turn around (social behavior, value of good relations etc.)

Examples of sunk costs

• A very frequent example is the partnership with success lacking. The decision, whether one should separate from its partner, is usually affected by the number of the together spent time and invested feelings.
• Product introductions at the market often accompany with high costs. Floppt the product, one should include not the costs already invested into the decision (product in the market to leave or withdraw), but orient oneself only at the future possibilities.

Articles in category "Sunk costs"

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• Sunk cost - Wikipedia, the free encyclopedia
  Sunk costs are sometimes contrasted with variable costs, which are the ... In this case though, the sunk cost with respect to the car at any given time is ...


• Sunk cost - Wikipedia, the free encyclopedia
  Sunk costs are sometimes contrasted with variable costs, which are the costs ... Sometimes only part of the price of a purchase ends up being a sunk cost. ...


• Sunk Costs - Dictionary Definition of Sunk Costs
  Sunk Costs Defined - A Dictionary Definition of Sunk Costs.