Sunk Cost

Type: Concept

As of November 2026, Sunk Cost has been mentioned in one podcast episode on The Diary Of A CEO (Aug 2026). Sunk cost is discussed as a psychological barrier that prevents people from quitting unproductive endeavors.

In economics and business decision-making, a sunk cost is a cost that has already been incurred and cannot be recovered. Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. In other words, a sunk cost is a sum paid in the past that should no longer be relevant to decisions about the future. Even though economists argue that sunk costs are no longer relevant to future rational decision-making, people in everyday life often take previous