Sunk Costs and Loss Aversion
Sunk Costs and Loss Aversion Sunk costs are usually defined as previously incurred costs that are not recoverable and should not be taken into account in decision making. Here is a slightly modified example of a sunk cost from Jerold Zimmerman’s “Accounting for Decision Making and Control” (Irwin McGraw-Hill): Example. Abadabba Berman, the comptroller [...]
