Sunk costs examples business report

But human psychology being what is, sunk costs do sometimes influence our next moves. They do not want to "lose the investment" by curtailing a project that is proving to not be profitableso they continue pouring more cash into it.

The training is a sunk cost, and so should not be considered in any decision regarding the computers.

sunk cost effect example

Those variables with statistically significant regression weights are considered to be moderators of the effect size Hunter and Schmidt In a similar vein, in his theory of cognitive dissonance Festinger argues that becoming aware that a decision will result in a loss and, thus, a failure implies a negative cognition for decision-makers.

You can learn more about budgeting from the following articles —. By Geoffrey Michael Updated Jul 30, There's an old saying that you shouldn't throw good money after bad.

A significant between-category variance indicates that the mean effect sizes across groups differ more than sampling error Lipsey and Wilson

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Sunk Cost Examples