Think Like An Economist S E3: Core Principle 2 - The Opportunity Cost Principle - Or What?
27 snips
Aug 18, 2020 AI Snips
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The "Or What" Trick
- Frame decisions using "or what" to explicitly consider alternatives.
- For example, instead of "Should I get an MBA?", ask "Should I get an MBA or continue working?"
Ignoring Sunk Costs
- Sunk costs are irrelevant to future decisions; ignore them.
- Focus on the best current choice, not past investments you can't recover.
The Donut Dilemma
- Justin Wolfers avoids free donuts at meetings to enjoy ice cream later.
- This highlights the opportunity cost: a donut now means no ice cream later.