PPRuNe Forums - View Single Post - UK maybe procuring AH-64E.
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Old 24th Mar 2014, 08:22
  #36 (permalink)  
ORAC
Ecce Homo! Loquitur...
 
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Excepting that we already have in excess of 140 RTM 322 engines. Not sure how much they cost per unit but they must be a least 2-3 million pounds each.
Sunk Costs

In economics and business decision-making, a sunk cost is a retrospective (past) cost that has already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken.........

In traditional microeconomic theory, only prospective (future) costs are relevant to an investment decision. Traditional economics proposes that economic actors should not let sunk costs influence their decisions. Doing so would not be rationally assessing a decision exclusively on its own merits. Alternatively, a decision-maker might make rational decisions according to their own incentives, outside of efficiency or profitability. This is considered to be an incentive problem and is distinct from a sunk cost problem.

Evidence from behavioral economics suggests this theory fails to predict real-world behavior. Sunk costs do, in fact, influence actors' decisions because humans are prone to loss aversion and framing effects. In light of such cognitive quirks, it is unsurprising that people frequently fail to behave in ways that economists deem "rational"...........
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