Crappy Birthday

Media Type: TV Clips Topic: Marginal Thinking, Behavioral Economics, The Firm

King of Queens

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Doug would rather watch the pay-per-view fight than spend Carrie's birthday with her.  Richie suggests Doug tell her he has already paid for the program. That plan will only work if Carrie doesn't understand sunk costs. Since Doug has already paid, his marginal cost of watching the fight is zero. The real question is about preferences, having already paid for the fight is just an excuse since it is a sunk cost. 

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