Thursday, May 14, 2009

Sunk Costs are Sunk

Last night, while watching TV in the basement, I wanted a little midnight snack. I ventured up into the kitchen to grab some cereal - chose Reese's Puffs and brought the box, a bowl and spoon, and milk downstairs. Perhaps this was a premonition: at the bottom of the stairs I stopped and realized I would've prefered Frosted Flakes. I decided against another trip upstairs and ended up stuck with the Puffs, which were stale (hence I believe it was a premonition).

"Sunk costs are sunk" - is this idiom practiced or only preached? Was my case the opportunity cost of walking up the stairs too great (seeing as I already had a substitute) or was I making my decision based on sunk costs?

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Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty