Eduard Braun on Opportunity Cost

Econ Off the Shelf

From Finance Behind the Veil of Money, page 32:

The opportunity-cost concept does not allow for the inclusion of time. Opportunity costs, in other words, are not a matter of action but of choice. James Buchanan is not the only one who stresses the close relationship between choice and opportunity cost. G. F. Thirlby, who published a lot on the cost problem, also writes: “By deciding to take the preferred course, he [any person] incurs the cost—he displaces the alternative opportunity.” According to this opinion, costs appear at the point of time when the decision is made and then lose all of their “significance . . . because the decision displaces the alternative course of action.” However, it seems to be problematical to link cost to choice. Decisions are not bound up with costs. To illustrate this hazardous statement, let’s have a look at an example.

Let us suppose friends X and…

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