We introduce a hitherto neglected but important concept which we call “reversal costs.” Reversal costs are the cost of undoing a decision. They figure in the background of all decision-making, and their analysis can explain many common phenomena. We present a simple formal model and illustrate the concept using several examples.

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hdl.handle.net/1765/99968
Rotterdam Institute of Law and Economics

Mielniczuk, T., & Pi, D. (2016). Reversal Costs. Retrieved from http://hdl.handle.net/1765/99968