Reversal Costs

12 Pages Posted: 15 Feb 2016 Last revised: 27 Mar 2019

See all articles by Tomasz Mielniczuk

Tomasz Mielniczuk

Erasmus University Rotterdam (EUR) - Rotterdam Institute of Law and Economics; University of Bologna - Department of Economics; University of Hamburg - Institute of Law and Economics

Daniel Pi

Mitchell Hamline School of Law

Date Written: February 14, 2016

Abstract

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.

Keywords: reversal costs, rational choice theory

JEL Classification: D11

Suggested Citation

Mielniczuk, Tomasz and Pi, Daniel, Reversal Costs (February 14, 2016). Available at SSRN: https://ssrn.com/abstract=2732335 or http://dx.doi.org/10.2139/ssrn.2732335

Tomasz Mielniczuk

Erasmus University Rotterdam (EUR) - Rotterdam Institute of Law and Economics ( email )

Burgemeester Oudlaan 50
PO box 1738
Rotterdam, 3000 DR
Netherlands

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

University of Hamburg - Institute of Law and Economics ( email )

Johnsallee 35
Hamburg, 20148
Germany

Daniel Pi (Contact Author)

Mitchell Hamline School of Law ( email )

875 Summit Ave
St. Paul, MN 55105-3076
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
71
Abstract Views
621
rank
365,808
PlumX Metrics