Opportunity Cost Consideration

17 Pages Posted: 17 Apr 2011

See all articles by Stephen A. Spiller

Stephen A. Spiller

University of California, Los Angeles (UCLA) - Anderson School of Management

Date Written: April 14, 2011

Abstract

Normatively, consumers should incorporate opportunity costs into every decision they make, yet behavioral research suggests that consumers consider them rarely, if at all. This research addresses when consumers consider opportunity costs, who considers opportunity costs, which opportunity costs spontaneously spring to mind, and what the consequences of considering opportunity costs are. 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 opportunity costs are less likely to buy focal options than those who do not when opportunity costs are appealing, but no less likely when opportunity costs are unappealing.

Keywords: opportunity costs

JEL Classification: M3, D1

Suggested Citation

Spiller, Stephen A., Opportunity Cost Consideration (April 14, 2011). Journal of Consumer Research, Vol. 38, December 2011, Available at SSRN: https://ssrn.com/abstract=1786930

Stephen A. Spiller (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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