Tag Archives: Christian_Apperal

You live with your stuff and the concept of a Sunk Cost.

I’m up late trying my hardest to rid myself of stuff. My friend, Bryan, reminded me that you really do “live” with your stuff. It’s me, my wife and our stuff.
And I have entirely too much stuff. There are some big ticket items to get rid of (including about 100 t-shirts) and I just need to do it ASAP. I’ve posted a lot on Craigslist, hoping to make a few bucks in the process, but then there is this economics lesson nagging at me.

Once you have spent money on something and you own it, that price/value is a sunk cost. If I paid $5 a shirt for the 100 shirts I thought I’d sell at a profit, no matter what happens I’ve already spent that $5, it’s sunk. So, when I have to get rid of them I’m desperately trying to make my $5 back, but the truth is that cost is gone, and their value is only going to be what someone will actually pay for them. If I can’t sell them for $5 a piece it’s silly for me to just keep them because I don’t want to “lose money” on the deal, I already did lose money.

Thank you economics class.
So how much will you pay for these shirts?