Historical costs, sometimes called sunk costs, are irrelevant to decision-making because they are costs that have already been incurred. That's something that's not intuitively obvious, even for some trained economists. On a couple of occasions, I've recommended to a graduate student, having difficulty with his Ph.D. dissertation, that it might be wise to start all over again with a different topic. The response:

"Professor Williams, but I've spent so much time on the dissertation ...

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