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:

Format
mla apa chicago
Your Citation
Econterms. "Defining Sunk Costs." ThoughtCo, Feb. 25, 2017, thoughtco.com/definition-of-sunk-costs-1147240. Econterms. (2017, February 25). Defining Sunk Costs. Retrieved from https://www.thoughtco.com/definition-of-sunk-costs-1147240 Econterms. "Defining Sunk Costs." ThoughtCo. https://www.thoughtco.com/definition-of-sunk-costs-1147240 (accessed November 18, 2017).