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An uber driver faces costs for driving that include sunk costs like insurance that contribute to the average cost per mile of $.50. yet when a rider offers to pay less than that for a ride, the driver agrees because 1) the driver is irrational; this decision will cause a loss. 2) the driver needs to cover all sunk costs to be better off by accepting the offer. 3) sunk costs like auto insurance (in this case) do not increase as driving increases
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