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Sunk cost and everyday life

In economics and business, sunk cost refers to a cost that has already been incurred and cannot be recovered.  We sometimes make irrational decisions about our future (I’m going to stay in this job I hate…) due to our misunderstanding of investment and our aversion to loss (…because I’ve already worked here 10 years). This is a failure to understand sunk cost.

Better to reflect on whether these things still serve you, rather than sticking with a job, a relationship, or social group because you’ve already “sunk” cost into them.

Be sure you’re not sinking further.

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