Opportunity Cost

Day 023 Week 04 Q1 Tuesday, January 23, 2024

Most have heard the phrase and can easily look up the definition. I will save you the trouble – the loss of potential gain from other alternatives when one alternative is chosen. Every decision has costs, but it is not always clear what they are, and there is always the possibility of unintended consequences. The only way to never experience any opportunity costs is to make no decisions and do nothing. I suppose there is a cost to this as well. We all miss all of the shots we never take.

The problem from a creative outlier perspective is as we have more choices, we also bear more opportunity costs. If you have no alternatives, then you do not have to pay an opportunity cost, or do you? Just because you are unaware of the alternatives does not mean there are none. Just because you are aware of many choices because you continue to create more options all of the time does not mean you are paying a greater opportunity cost.

Every time you make a choice or decision, it ripples outward into your future. And you can also change your mind, changing the directions of the ripples. Some people spend a great deal of time making and changing choices and decisions. It may even be a way to avoid moving forward. And this is the greatest opportunity cost of all. Nonconvergence is always at the expense of convergence. 

Not making decisions may appear to avoid a short-term opportunity cost, but the longer-term cost of being indecisive may be that you never get anything done. This is one of the possible differences between theoreticians and experimentalists. If you stay in theory, you can never be wrong, never pay any opportunity costs, and also possibly never do anything.

Have you ever met a charismatic person who went on very many dates and had numerous short-term relations?  They may also have never experienced the joy of a long-term relationship either and may even die twenty years earlier because of this. They had so many ideas that they never had time to pursue any of them. Or spent so much time “starting up” that they never even got to the middle of anything, never mind the end.

Having too many choices and not enough choices both are problematic. Both are easy to solve through what I call opportunity management. If you do not have enough choices or any good choices, then invent a few more until you do. If you have so many choices that it is making your head spin, stop creating them.

Have you ever considered having a specification for choices or choice numbers? No, I did not think so. The real issue about making decisions is you do need to know what you want and what you need.

This is the same problem as setting goals instead of defining behaviors, it is pointless if you do not know where you are going and where you are because they are all context-dependent. What is the opportunity content?