Mike Detillier comments. Very interesting, indeed!

JKool · 04-28-2005, 05:11 PM

I stand corrected on the notion of recoverable:

Sunk Cost

Sunk costs refer to costs that are non-recoverable fixed costs. Digital products usually have significant sunk costs (when compared to other fixed costs) in the form of research & development and intellectual property (patents etc.) for the product. If the product is not successful in the marketplace, the costs associated with the the product development (intellectual property, labor) cannot be recovered. Thus when making pricing decisions about the product in the future, one should not factor in the sunk costs.

From: http://www.definethat.com/define/337.htm

Either way, my point stands. Sully\'s cost of 2 1st rounders and his signing bonus are sunk fixed costs - they cannot be recovered. The marginal (and variable) costs (such his current and future salary - as I noted above) those are still open to question.

04-28-2005, 05:11 PM	#21
JKool 1000 Posts + Join Date: Nov 2003 Location: Madison, WI Posts: 2,423	Mike Detillier comments. Very interesting, indeed! I stand corrected on the notion of recoverable: Sunk Cost Sunk costs refer to costs that are non-recoverable fixed costs. Digital products usually have significant sunk costs (when compared to other fixed costs) in the form of research & development and intellectual property (patents etc.) for the product. If the product is not successful in the marketplace, the costs associated with the the product development (intellectual property, labor) cannot be recovered. Thus when making pricing decisions about the product in the future, one should not factor in the sunk costs. From: http://www.definethat.com/define/337.htm Either way, my point stands. Sully\'s cost of 2 1st rounders and his signing bonus are sunk fixed costs - they cannot be recovered. The marginal (and variable) costs (such his current and future salary - as I noted above) those are still open to question.