Sunk cost explained: Stop letting the past control the future

Sunk cost explained: Stop letting the past control the future

Sunk cost is a cost that has already been incurred and cannot be recovered, regardless of what decision is made going forward.

From an economic perspective, sunk costs are irrelevant to future decision-making. Rational decisions should be based only on future costs and future benefits, not on money, time, or resources that have already been spent.

Simple example