Concept · Foundations

Sunk Cost

A cost that has already been incurred and cannot be recovered regardless of future action.

Why it matters

Rational decision making is forward-looking, which means sunk costs should never influence current choices; the sunk-cost fallacy is the tendency to let them do so anyway.

Where this shows up

Units and lessons using this concept

Following the links will take you to the page where this term is introduced in context.

Units (1)

Decision Theory: Choosing Under UncertaintyStudents learn the logic of rational decision making under risk and uncertainty, including expected value, utility, decision matrices, do…

Lessons (2)

Capstone: Decisions Under Real UncertaintyDecision Theory: Choosing Under Uncertainty Sunk Costs, Opportunity Costs, and FramingDecision Theory: Choosing Under Uncertainty

Other concepts in Foundations

A, E, I, O Propositions Accessibility Relation Argument Atomic Statement Base Rate Bayes Factor Calibration Cardinality Cartesian Product Categorical Proposition Categorical Syllogism Circularity