Sunk Costs, Depreciation, and Industry Dynamics
نویسندگان
چکیده
منابع مشابه
Are sunk costs really sunk?
The problem of relevance of sunk costs in managerial decisions concerning a plant is studied. It is shown that under fairly general assumptions about the rationality of the managers the irrelevance of such costs, frequently claimed by economists and accountants, is weakly founded. An application to a specific problem of use of a machine is studied and the optimal use decision problem solved.
متن کاملThe Economics of Radiator Springs: Industry Dynamics, Sunk Costs, and Spatial Demand Shifts
The construction of the Interstate Highway System in the United States and its impact on local industries continues to be part of American folklore and popular culture, over 50 years after construction started and over 25 years after it was essentially completed. The plot of Disney/Pixars 2005 animated feature "Cars" concerns a town ("Radiator Springs") whose population had severely declined a...
متن کاملSunk Costs, Fairness, and Disagreement
We study a bilateral trading relationship in which one agent, the seller, can make a non–recoverable investment in order to generate potential gains from trade. Afterwards, the seller makes a price offer that the buyer can either accept or reject. Economic theory predicts that if agents are selfish, neither the level of investment cost nor the buyer’s information about costs should affect the o...
متن کاملIndustrial Network Dynamics & the Role of Sunk Costs
Although the notion of costs is a major mechanism in economic theory explaining the industrial organization, costs associated with various forms of inter-firm relationships have been largely neglected in the literature. This paper deals with the notion of sunk costs related to networks of inter-firm relationships with a focus on the dynamics of the network structures. Two perspectives of sunk c...
متن کاملFixed and Sunk Costs Revisited
The authors attempt to clarify the concepts of, and the link between, fixed costs and sunk costs. They argue that the root for possible confusion between fixed costs and sunk costs is the inconsistency in defining the term fixed costs. They define fixed costs uniformly as the costs that are independent of the level of output and suggest that instructors refer to the part of fixed costs that are...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Review of Economics and Statistics
سال: 2012
ISSN: 0034-6535,1530-9142
DOI: 10.1162/rest_a_00236