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Title: |
Research on Concepts and Causes of Sank Costs and Sunk Cost Effect |
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Source: |
International Conference on Engineering and Business Management 2012(Part 2 Enterprise Operation and Management（2）)
(pp 1223-1227)
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Author(s): |
Ming Lin, Wenzhou University, Wenzhou, China, 325000
Jianqiu Wang, Wenzhou University, Wenzhou, China, 325000 |
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Abstract: |
This paper systematically discusses the concept and formation cause of sank costs firstly,discusses the relation between various decision-makers and sank costs later, specially studies the rational and irrational causes of sunk cost effect on the basis of former information, and makes decisions according to sank costs and the causes of sank cost effect finally. The paper believes that the nation should lower the sank cost through macro-policies and economic system construction mainly from the perspective of causes for forming the sank costs, and enterprises should defend the influence of sank cost on decision-making through establishment of management system mainly from the perspective of causes for causing sank cost effect.
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