Sunk costs, or sunk expenditures are in the economy costs already made and no longer undone. When taking operational economic decisions, these sunk costs should not be taken into account. It is seen as one of the well-known pitfalls in taking an economic decision. Example
Someone has already ordered a concert ticket, but does not want to go. However, he can not sell this ticket. Rationally, this person should not completely take into account the paid ticket because the costs have already been made and thus have no effect on the decision to go to the concert or not. However, people tend to go to the concert often because they argue (irrationally) that it would be different from the card (or otherwise said of the money invested in the card). Effects
You should not take into account sunk costs, but these costs may have effects. A company that has already invested a lot of money in the production of certain products will invest less quickly in another product than a new company without these investments. For the company with the investments made it is more expensive to invest in the new product compared with the cost of investing in the old product. The old product has already made significant development and production costs (such as the purchase of specific machines) and a new product must be re-made.
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