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Saturday, 24 December 2011

Sunk Costs

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Many gold makers in World of Warcraft can on occasion find themselves in a situation where they have spent a large amount of gold on a project that is almost completed and then realise that the sales they will make will not cover the cost of the completed project.

Perhaps the most common example here is an alt that is almost fully levelled a profession.  It is 85% complete and you realise that the market you thought was present is operating at a permanently lower level and you will never recover the cost of your power levelling.

So, what to do?

The player must realise that the gold already spent is lost forever and can not be retrieved.  Therefore, it is a “sunk cost”.

Hence, the way forward from here is to determine the total investment needed to complete the project and compare that amount to the sales price of the finished item.  If the sales price is higher than the gold required to complete the project then the gold should be spent.  That way, at least the player recovers some of the gold already spent.


  1. But you must also factor in the lost opportunity cost of not being able to level a different profession on that toon.

  2. Yes, that is a good point. To expand on the above point - the meaning here is the lost profits you would have made had you levelled a different profession instead. Hence, it is not only the remaining cost to levelling you current profession but also the profits less the costs of levelling a new profession at need to be taken into account.


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