Opportunity Cost Consideration

When do consumers consider opportunity costs? Normatively, consumers should incorporate opportunity costs into every decision they make, yet behavioral research suggests that consumers consider them rarely if at all. I examine when consumers consider opportunity costs, who considers opportunity costs, which opportunity costs spontaneously spring to mind, and what are the consequences of considering opportunity costs. Perceived constraints cue consumers to consider opportunity costs, and consumers high in propensity to plan consider opportunity costs even when not cued by immediate constraints. The specific alternatives retrieved, and the likelihood of retrieval, are functions of category structures in memory. For a given resource, some uses are more typical of the category of possible uses and so are more likely to be considered as opportunity costs. Consumers who consider their opportunity costs are less likely to buy when opportunity costs are appealing, but no less likely to buy when opportunity costs are unappealing. 3 Consumers face opportunity costs: they have unlimited wants but limited resources, so satisfying one want means not satisfying another. I conceptualize opportunity cost consideration as considering a specific use for one’s resources other than the focal option. Considering