Interactive: Sunk Cost or Not?

When it comes to Sunk Costs, don’t let your financial well-being go down with the ship.

We’ve all been there. You’re staring down at what was once a beautiful plate of delicious (and spendy) food. There are a few scrumptious bites left, but you feel like one more fork-full will put you over the edge. But you have to finish the plate to get your money’s worth, right? This interactive game from Marginal Revolution University will test your ability to leave sunk costs behind. 

Questions:

• What is a sunk cost?
• Can you give an example of a sunk cost from your own experience or from a hypothetical situation?
• How should sunk costs be treated when making financial decisions?
• Why might it be challenging to ignore sunk costs?
• Have you ever bought something that didn’t meet your expectations, but you continued to use it because you paid for it? Reflect on how the concept of sunk costs influenced your decision.
• How can the concept of sunk costs apply to time investment, such as staying in a club or activity that no longer interests you? Discuss the parallels between financial sunk costs and time as a resource.
• Can the idea of sunk costs apply to relationships or friendships? Give an example of how sunk costs might influence someone’s decision to stay in or leave a relationship.

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Be sure to check out NGPF’s Behavioral Economics unit for lessons, activities, and more!

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Looking for more interactive resources? Be sure to check out the NGPF Interactive Library. 

About
the Author

Ryan Wood

Ryan grew up with and maintains a love for learning. He graduated from the University of Wisconsin-Green Bay with a degree in Business Administration and worked in sports marketing for a number of years. After living in Texas, Colorado, Tennessee, and Minnesota, the call of education eventually brought Ryan back to his home state of Wisconsin where he was a Business and Marketing teacher for three years. In his free time he likes to spend time with his wife and daughter, play basketball, read, and go fishing. Now with NGPF, Ryan is excited to help teachers lead the most important course their students will ever take.