Opportunity cost
The value of the best alternative you give up whenever you choose.
What it means
Opportunity cost is the value of the next-best alternative that is forgone whenever a choice is made — the true economic cost of any decision, since choosing one option always means surrendering whatever you would otherwise have done with the same money, time, or resources. The concept is foundational to economic reasoning because it insists that the real cost of something is not its price tag but everything else that price (or that hour) could have bought. The behavioral wrinkle is that people chronically neglect opportunity costs: because forgone alternatives are not visible or salient at the moment of choice, spending and time decisions look cheaper than they truly are, and prompting people to consider 'what else could I do with this?' measurably changes their willingness to buy. This neglect is a cousin of other attention-driven biases, since opportunity costs must be actively generated in the mind rather than read off the environment. Making opportunity costs explicit is therefore a debiasing technique. It matters because nearly every decision about money and time is, properly understood, a trade-off against unseen alternatives that people routinely fail to weigh.
Examples
An hour spent in a pointless meeting costs not nothing but the most valuable thing you could have done with that hour instead.
A student taking an unpaid year of extra study is not just paying tuition. The bigger cost is the year's salary forgone, which for many courses quietly dwarfs the fees.
Shoppers offered a DVD chose to skip it more often when the alternative was spelled out as keeping the money for other purchases, rather than simply as not buying — the same choice, made visible.
First described in Foundational economics.