Sunk cost and everyday life

In economics and business, sunk cost refers to a cost that has already been incurred and cannot be recovered.  We sometimes make irrational decisions about our future (I’m going to stay in this job I hate…) due to our misunderstanding of investment and our aversion to loss (…because I’ve already worked here 10 years). This is a failure to understand sunk cost.

Better to reflect on whether these things still serve you, rather than sticking with a job, a relationship, or social group because you’ve already “sunk” cost into them.

Be sure you’re not sinking further.

Feel free to comment, reply, correct, or share your views

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s