Internal tradeoffs: Opportunity cost

[maryanndimand]

I wrote about a choicemaker's internal tradeoff rate between options in the possibility set-- the amount of an item the choicemaker would be just willing to give up to get another unit of another item

Comments

[resonant]

And some decisions have an S-shaped curve. If your car has many dents, fixing one will have zero impact on its resale value, and will have a negative impact on utility since you won't be able to use it while it is in the shop. It's only after fixing dents starts making a visible difference do you get onto the classic curves.

[maryanndimand]

Yes, just so! I thought about adding in this detail, but it seemed like it might be too much. Just right in a comment, though, so particular thanks.

Unless your possibility set is very small indeed, you're best off to consume at least until the benefits of each extra bit are declining.