People consistently consider sunk costs when weighing the trade-offs involved in a decision because they:

Question

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Sunk costs are past costs that have already been incurred and cannot be recovered. People often consider sunk costs in their decisions because they find it hard to accept their losses, leading to irrational decision-making where they continue investing in a losing proposition rather than cutting their losses. This behavior is contrary to economic theory, which suggests that only future costs and benefits should be considered in decision-making.

People Consistently Consider Sunk Costs When Weighing the Trade-Offs Involved