Opportunity cost neglect and consideration in the domain of time

Abstract

Every decision regarding a course of action incurs an opportunity cost. Such costs are relevant to the decision but often neglected. Opportunity costs are more likely to be considered when alternatives are top-of-mind or when the decision maker faces severe resource constraints. Considering opportunity costs of time may differ from that of money because people are less likely to mentally account for their time and more likely to have specific plans for specific units of time. The benefit from a course of action may be realized at a different point in time than its opportunity cost. Such opportunity costs that arise in the context of intertemporal choice are more likely to be spontaneously considered for now than for later.