# 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"?

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
• The title of the question seems to be referring to the sunk cost fallacy (thedecisionlab.com/biases/the-sunk-cost-fallacy) but the description makes me wonder if it's just a convex utility function May 17 at 21:14

## 2 Answers

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 $$u=3$$.

• Maybe the opportunity cost of spending 4 is >3 May 18 at 9:46

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.