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nyounger nyounger
wrote...
Posts: 373
3 months ago
Joe pre-orders a non-refundable movie ticket. He then reads a number of reviews of the movie in question that make him realize that he will not enjoy it. He goes to see it anyway, rationalizing that otherwise his money will have been wasted.  Is Joe succumbing to the Sunk Cost Fallacy, and why?

▸ No, because the cost of the movie was not recoverable and would have been lost whatever action he took.

▸ No, because he incurred no further costs by going to see the movie.

▸ Yes, since he invested a valuable asset, his time, in a project based on its previous costs.

▸ No, because going to see the movie means that the product of his initial investment was realized as originally planned.
Textbook 

Fundamentals of Corporate Finance


Edition: 2nd
Authors:
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Replies
wrote...
3 months ago
Yes, since he invested a valuable asset, his time, in a project based on its previous costs.
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