In economics, a cost that has already been incurred and cannot be recovered is called a sunk cost.
Examples include money spent on a nonrefundable ticket, research that cannot be reused, or advertising already purchased. Because the expenditure cannot be changed by a present decision, standard economic reasoning says it should not determine whether to continue or abandon a project.
This principle is linked to the sunk cost fallacy, in which people continue an activity mainly because they have already invested resources in it. A rational decision should instead compare the future costs and benefits of the available options.
Sunk costs are different from fixed costs. A fixed cost does not vary with current output, but it may still be avoidable in the future. A cost becomes sunk when it is irretrievable. Businesses also distinguish sunk costs from opportunity costs, which represent benefits sacrificed by choosing one option over another.