Economics – What is Opportunity Cost?

So I mentioned this a fair bit yesterday, where I was talking about piracy, and thought it might be wise to address what it is. It’s not particularly complicated, really, it’s what you give up when you choose to do something.

Writing blog posts takes primarily time. Time that could have been used to do other things instead, like washing dishes or playing your favorite game. The opportunity cost of blogging are those things you chose not to do. It’s nearly impossible to do anything without giving something else up, especially since time is the limited resource. One could make a case that this is why dishes infamously don’t get done. The opportunity cost is too high.

My problem is that I see it in everything, right now. By talking about it I have become temporarily hyper-aware of it. We tend to acknowledge it more casually though, on a daily basis. Every time we say “I should probably be doing that” or “I need to be doing the other thing” we’re saying that there’s another activity we are giving up because quite frankly we’d rather be doing the current one instead. I would generally caution people not to beat themselves up over these choices. We are ourselves, in the moment. While I certainly have a list of things I regret, it’s really the unforeseeable outcomes that are regrettable. The same self, put in the same situation, with the same information, would probably make the same choice. Probably. The important lesson being that when the situation arises again, you will be able to make a more knowledgable choice.

In the context of piracy and DRM, the whole point of DRM is to increase the opportunity cost of piracy. The more difficult and time consuming it is, the more likely people are to choose to do something else instead. Denuvo almost had a lid on it for a minute there, but humans are strange and stubborn creatures, not wont to abandon hope easily.

That’s ultimately one of the major flaws of economics, in my opinion. The idea that the individual actors act rationally is great for a theoretical framework, but I don’t really see humans as particularly rational. Statistically predictable in large groups, sure, but not necessarily rational.

Okay, I’ll go on now. Hopefully, that provided some clarity on yesterday’s post, even if it wasn’t strictly needed or asked for.

Y’all take care. Instead of agonizing over today’s decisions, resolve to make better ones tomorrow.

BlaugustBOnlylogoIn case you haven’t heard, we’re in the middle of an event called Blaugust. The goal is to simply promote and stimulate the blogging community by encouraging people of all skill levels and backgrounds to post. The official post can be found here and it’s never too late to start.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s