But the sunk costs are not relevant to the decision about how quickly to withdraw.
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Since pipeline costs are mostly sunk costs, not variable, about 95% of that drops to the bottom line.
Nearly all the expertise, research and sunk costs are in the old technology.
We can go further too: sunk costs make no difference at all to the marginal costs of providing something.
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The political system is so focused on the next budget and the next election that it ignores sunk costs.
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Few governments can resist fiddling around with contracts when times are good, especially when sunk costs are involved from international investors.
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But the most likely culprit is our overwhelming aversion to sunk costs.
Companies should largely write off these investments as unrecoverable sunk costs.
Given that the sunk costs are, well, sunk, the only thing that we can control about the mission going forward is future costs.
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If what people order is already fitting more accurately, perhaps then businesses can reduce some of these sunk costs and improve quality elsewhere.
And yet, many projects have not yet been canceled, with utilities and ratepayers accepting ever more risk in order to rescue sunk costs.
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If younger workers had their own accounts, Social Security liabilities could be treated as sunk costs to be amortized over the next 30 or so years.
Patent a miracle drug, choreograph the pricing just right and you recover your sunk costs efficiently, earn a good profit and move on to your next miracle.
Additionally, retailers are taking the costs on pre-paid returns for items shipped to consumers, something that is already adding to the sunk costs of return fraud.
This suggests that when things go wrong and sunk costs are high, most of us naturally become prevention-minded, and more likely to try to keep waging a losing battle.
Nevertheless, it is wrongheaded, and despite the sunk costs and the difficulty of reversing field in the policy world, the Clinton Administration should make a gradual but unmistakable about-face.
It allows a handful of smart people with T-1 connections to skim off the real value proposition and leave the large incumbents holding the bag of commodity assets and sunk costs.
The company should already be charging the most it can for that marginal phone call and a change in sunk costs might affect accounting profit but not that revenue maximising price charged.
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The news that a powerful carmaker would be forced to abandon a fully built factory and start over was stunning not only because of the staggering sunk costs of building a now-worthless factory.
FORBES: White House Says Costs Will Not Factor Into Afghanistan Drawdown Decision--Really????
So in order for the marginal return to be attractive, you have to consider the presence and financial terms around those sunk investment costs.
If they do not find oil, they can cap their outlays at the costs already sunk.
But, listen, they had sunk a lot of costs in settlement.
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New technologies always struggle to compete with well-entrenched rivals whose costs are already sunk.
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