—“Curt: What’s a Forgone Opportunity Cost?”—
Good question.
An opportunity cost refers to the difference in cost between alternative choices.
A forgone opportunity cost is a form of opportunity cost wherein you bear a cost of *restraint* (not seizing an opportunity) in order to pay for something else. Most notably the institution of property rights itself.
So the opportunity cost of buying a pizza versus saving for a motorcycle, or buying a steak dinner versus the forgone opportunity cost of returning a lost wallet to the person that has lost it – contents intact.
In general I use forgone opportunity costs to refer to the means by which we pay for normative commons: manners, ethics, morals, traditions, rituals, festivals, where we forgo opportunities for discounts or gains in order to create less tangible goods (morality is the best example.)
Good question.
An opportunity cost refers to the difference in cost between alternative choices.
A forgone opportunity cost is a form of opportunity cost wherein you bear a cost of *restraint* (not seizing an opportunity) in order to pay for something else. Most notably the institution of property rights itself.
So the opportunity cost of buying a pizza versus saving for a motorcycle, or buying a steak dinner versus the forgone opportunity cost of returning a lost wallet to the person that has lost it – contents intact.
In general I use forgone opportunity costs to refer to the means by which we pay for normative commons: manners, ethics, morals, traditions, rituals, festivals, where we forgo opportunities for discounts or gains in order to create less tangible goods (morality is the best example.)