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1The Problem of Economising and Sunk Costs 1 Citation Today's post may seem a bit technical, but it has everything to do with day-to-day decisions for ordinary people.This subject came up for us when we were trying to think about ways to save on our phone bill. We pay a fixed charge for our phone service. It is the cheapest plan we can get. We never use all the minutes we are allotted, and if we talk evenings and weekends we can jabber on endlessly if we choose to.Why is the economic system set up to provide an incentive to consume as much as possi, technorati.com
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Pizza franchise sold on internet for $181 NZ 1 Citation Q: How much is a used ?high quality? franchise worth these days in New Zealand? A: $181.00 Franchisees operate their businesses thinking that they will recoup their investment when they sell. Many operators accumulate big losses in the hope of hitting the jackpot when they sell. It almost always never happens. Your money is sunk in the business and you will never get it back Every franchise should pay it?s way and then some or be exited, immediately. Case in point: $181 restau, technorati.com
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Marginal Cost and Marginal Benefit, or Why I Always Get Free Shipping at Amazon.com 1 Citation Economists work from the assumption that individuals seek to maximize their utility. In less technical terms, that means that people try to make themselves as happy as possible. When faced with choices, people need some way of evaluating the costs and benefits of each of their options to decide which is the best. Economic theory suggests that people make the best decisions when they evaluate the marginal costs and marginal benefits of their options. Where total cost and total benefi, technorati.com
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Good Luck with that: Getting Bank Examiners to Act 1 Citation This post greatly expands upon a comment we made about regulation in Even A Perfect Bailout Will Fail and possibly elsewhere. Regulators as wise monkeys. Today?s The Wall Street Journal has an article entitled, Bank Examiners Are Told to Step Up Sanctions on Lenders. The first sentence of the article says it all: ?The U.S. government?s armies of bank examiners have been ordered to be more aggressive in applying formal sanctions to financial institutions when problems are found.? Unfortunatel, technorati.com
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1 Citation A common negotiation technique is to get someone emotionally involved in an agreement and then make slight adjustments just before agreement closure. The negotiating "victim" hasn't lost anything yet, but since his or her emotions have become involved, pulling out of the deal becomes considerably harder. In Project Management terms, this would be called a sunk cost. You may have no reason whatsoever to continue along a certain path, but because you have already spent some sum of money (your s, technorati.com
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1 Citation This is an article I like to share it with you. I hope you will enjoy it as well...Do you say things to yourself like, "It's too late for me", "I'm too old", or "If only I could go back to (some earlier point in my life)". If you say things like that you might consider the possibility you're making a classic reasoning error called the fallacy of sunk cost.A fallacy is an illogical way of thinking that's very appealing to almost everybody almost all the time. It doesn't say anything bad about you, technorati.com
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1 Citation If we did not do this already, would we go into it now? The question has to be asked---and asked seriously---"If we did not do this already, would we, knowing what we know, go into it now?" If the answer is no, the reaction must be "What do we do now?" In three cases the right action is always outright abandonment. Abandonment is the right action if a product, service, market, or process "still has a few years of life." It is these dying products services, or process that always demand the gr, technorati.com
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The Government's Debut, as Judged by the Dow Jones 1 Citation This graph shows the Dow Jones performance since Obama's inauguration : I don't think that the Dow Jones should be used to evaluate the performance of any government, yet the dismal market reactions combined with high expectations before inauguration indicate that the economic philosophy and policies of the new administration have failed to convinced major economic players. The WSJ for example agrees : Americans have welcomed the Obama era in the same spirit of hope the President campaigned o, technorati.com
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1 Citation Di 7 Apr 2009Thijs onder Telecom , Uit de lucht Wie mobiel belt betaalt per minuut. De prijs per minuut is veel hoger dan de marginale kosten die de operator daarvoor maakt: die zullen niet veel hoger dan nul liggen. In feite betaalt de beller stukje bij beetje de (vaste) kosten van de aanleg van het netwerk terug.Dat gaat mis als de beller gebruik gaat maken van Skype, de gratis internet-beldienst. Wie een onbeperkte databundel heeft (?10,- per maand) kan dan kosteloos bellen met zo?n beetje, technorati.com
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1 Citation A correta decisão de um gestor passa por conhecer alguns dos conceitos técnicos. Em minha opinião, o mais difícil de aprender e aplicar é o de custo perdido. Geralmente a noção de custo perdido é aprendida nos livros de contabilidade gerencial ou de custos, muito embora algumas obras de finanças também comentem o assunto. Entretanto, apesar da existência do conceito e da explicação, os gestores insistem em não levar em consideração este conceito no processo de tomada de decisão. Isto é algo tã, technorati.com
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