<p>I can't see anything but <em>utility maximization</em> here. With a quasilinear utility function, u = v - c, the first two options yield <span class="math-container">$u=0$</span> while the third one yields <span class="math-container">$u=3$</span>.</p>

CC BY-SA 4.0
2022-05-18T07:52:23.810Z
2022-05-18T07:52:23.810Z
VARulle
<p>From a Production Theory standpoint, I would argue that you have a convex &quot;production function&quot; (input = Cost, output = Value). In other words, the house purchase has <em>increasing returns to scale</em>.</p>

CC BY-SA 4.0
2022-05-18T06:12:49.847Z
2022-05-18T06:12:49.847Z
Martin Georg Haas
<p>I came across this idea while looking to buy a house and I wondered if there was a term for it. The initial purchase options have a linear cost to value relationship. However, I'm tempted to make a larger purchase than planned because the additional value is proportionately much higher.</p>
<p>Simple Example:</p>
<ul>
<li>Option 1: Cost = 3, Value = 3</li>
<li>Option 2: Cost = 5, Value = 5</li>
<li>Option 3: Cost = 7, Value = 10</li>
</ul>

CC BY-SA 4.0
2022-05-17T21:14:52.673Z
The title of the question seems to be referring to the sunk cost fallacy (https://thedecisionlab.com/biases/the-sunk-cost-fallacy) but the description makes me wonder if it's just a convex utility function
Ishan Kashyap Hazarika
<economic-terms>
Is there a term that describes the idea "I've already spent this much, I might as well pay a little more to get what I want"?
RWL01
# Is there a term that describes the idea "I've already spent this much, I might as well pay a little more to get what I want"?

(Asked by: username_0 on 2022-05-17)

I came across this idea while looking to buy a house and I wondered if there was a term for it. The initial purchase options have a linear cost to value relationship. However, I'm tempted to make a larger purchase than planned because the additional value is proportionately much higher.

Simple Example:

* Option 1: Cost = 3, Value = 3
* Option 2: Cost = 5, Value = 5
* Option 3: Cost = 7, Value = 10

**Tags:** economic-terms

> **Comments:**
> **username_1**: The title of the question seems to be referring to the sunk cost fallacy (https://thedecisionlab.com/biases/the-sunk-cost-fallacy) but the description makes me wonder if it's just a convex utility function  

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## 2 answers

### Answer by username_2 on 2022-05-18. Score: 0 | Accepted answer

I can't see anything but *utility maximization* here. With a quasilinear utility function, u = v - c, the first two options yield $u=0$ while the third one yields $u=3$.


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### Answer by username_3 on 2022-05-18. Score: 0

From a Production Theory standpoint, I would argue that you have a convex "production function" (input = Cost, output = Value). In other words, the house purchase has *increasing returns to scale*.


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