Chapter 1 of 10All chapters
Chapter 1 of 10
Choosing under scarcity
Everything has an alternative.
Opportunity cost
The cost of a choice is the best thing you gave up to make it. Money is the obvious version, but time and attention work the same way.
- An hour saved is worth what you would otherwise do with it.
- Free options usually charge in time, data or attention.
Sunk costs
Money already spent cannot be recovered and should not shape the next decision. Finishing something you no longer want because you paid for it turns one loss into two.