Defining Sunk Costs

Chuck Cross/EyeEm/Getty Images

Sunk costs are costs that are unrecoverable (i.e. nonrefundable) and represent past expenditures. These should not normally be taken into account when determining whether to continue a project or abandon it because they cannot be recovered either way. It is a common irrational instinct to count them, however. Terms related to Sunk Costs are Average Total Cost, Transaction Costs, and the Cost Curve.

Here Are a Few Starting Points for Research on Sunk Costs:

Books on Sunk Costs:

  • Sunk Costs and Market Structure
  • The Effects of Competition: Cartel Policy and the Evolution of Strategy and Structure in British Industry
  • Pushing the Numbers in Marketing: A Real-World Guide to Essential Financial Analysis

Journal Articles on Sunk Costs:

You Might Also be Interested in These Resources on Sunk Costs:

mla apa chicago
Your Citation
Econterms. "Defining Sunk Costs." ThoughtCo, Feb. 25, 2017, Econterms. (2017, February 25). Defining Sunk Costs. Retrieved from Econterms. "Defining Sunk Costs." ThoughtCo. (accessed March 21, 2018).