Opportunity Cost

In economics, the term “opportunity cost” refers to the value of the next best alternative that you must forego in order to pursue a certain action. The choice you make depends upon your preferences, your goals, the outcomes you expect and the circumstances you find yourself in.

Notice the word ‘you’ and ‘your’. The choices are supposed to be made by you, for you.

But in life, it works differently. Economic models often assume that individuals act independently, but human beings rarely make decisions in isolation.

The ‘you’ is replaced by people or society. The choice you make begins to depend on society’s preferences, the goal society sets for you, the outcome society expects from you and the circumstances society places you in.

This is not because we are weak or not capable of independent thoughts but because we are social creatures.

James Clear, in his book, Atomic Habits writes, that we do not choose our earliest habits, we imitate them. We follow the scripts handed down by our family, friends, schools, our local community and society at large. Each of the script comes with its own expectations or standards. Clear further argues that behaviours become attractive when they help us fit in. He argues that we imitate the habits of three groups- the close, the many, the powerful.

We imitate the close- family, friends, relatives. We soak up their qualities and practices. We imitate the many -because we want to fit in. We would rather be wrong with the crowd than be right by ourselves. We imitate the powerful- because we are drawn to status, respect, approval and admiration.

Many of our daily habits, beliefs, choices are the reflections of the people around us. A famous experiment by a psychologist Solomon Asch in 1950 helps explain just how a strong opinion of a group influences an individual. Participants were shown simple lines and were asked to identify which lines matched in length. The correct answer was often obvious. However, when the other members deliberately gave the wrong answer, many participants abandoned their own judgement and agreed with the group. Eventually, they delivered the answer they knew in their heart to be incorrect.

The desire to belong often proved strong then the desire to be correct.

If a choice, a decision, habit helps us fit in the group we readily embrace it.

But, every choice comes with some opportunity cost. When our choices are shaped by others, the opportunity cost is much greater than we realize. It is not merely the opportunity cost of one decision instead of another.

It is the opportunity cost of yourself.

This does not mean society has nothing valuable to offer. Families, communities, culture provide guidance, belonging and support.

The problem begins when guidance turns into control.At that point, the greatest thing we sacrifice is our ability to choose for ourselves. It is important that before making any decision, ask yourself whether the choice reflects your own preferences, goals and aspiration.

Because at the end, the cost of becoming what others want you to be may be at the loss of who you truly are.