Agree or Disagree? Why?

Question: Discuss how Benefits and Costs factor into decision-making. If you look closely, you will find that the concept of sunk costs is also referred to in the video. A major shout-out to whoever can identify and expound on this concept as well!

Answer: Three critical ideas surround decision making with respect to benefits and costs.Collectively, opportunity cost, fixed-cost fallacy or sunk cost, and hidden-cost fallacy assist the decision maker identify results and consequences of decisions - if effective attention to the elements is given.The three-decision matrix of cost and benefit tools are warranted based on the individual's attention to options, when consideration of irrelevant elements, and ignoring relevant information is made.The author's surmise decision making as the end result of the, "Relevant costs and benefits of a decision"(Froeb, McCann, Shor, & Ward, 2016, p. 32).In other words, the relevant cost is the defined diverse result following evaluation of the decision's cost and benefits of the individual or firm.

Theopportunity costparadigm is where one alternative out-weighs the other either in value, cost, or time / resource.Therefore, the decision's consequence yields to positive or negative results based on the determined substitute.Alternatively, the cost or benefit can be factored with no decision, as the opportunity was presented (Froeb, et al., 2016, p. 32).

Fixed-cost fallacyandsunk costsare the decision maker's focus on unrelated costs and benefits.This generally is the outcome of the decision maker's lack of recognition to no change in their control of the cost or benefit (Froeb, et al., 2016, p. 32-33).

Finally, thehidden-cost fallacyis the lack of consideration or ignoring the relevant cost and benefit.Simply, the hidden-cost fallacy is the consequence when attention is not paid to the specific benefit or cost, generally resulting in unintended consequences.(Froeb, et al., 2016, p. 34-35)

In the video I believe the sunk cost was Sheldon's painstaking and time-consuming research into the PlayStation versus XBOX decision.Ultimately, he invested an apparenet amount of time into making a decision, when at the end he never purchased a product.The idea of sunk costs is derived from business and economics; however, the term and principle are also applied to behavior.Specifically, Professor Olivola tells that "The sunk cost effect is the general tendency for people to continue an endeavor, or continue consuming or pursuing an option, if they've invested time or money or some resource in it" (Ducharme, 2018)

I genuinely enjoyed the flip a coin methodology, in reflection of emotional response on the decision made by the 50:50 chance.Steven Levitt's work was interesting, particularly the results and populated timelines following a person's decision.Most notably, I appreciated how the coin toss process would advise you of your gut decision, simply by your relief or anxiety of the result.

The Managerial Econ, Subsidies to "Flatten the Curve" conducted varied cost and benefit analysis of COVID-19 and its annual impact on Americans.Weighing the alternatives to flattening the curve, the authors compared viable alternatives to the fight against the invisible enemy.However, their arguments seem in line with the world toward Sweden and their Herd Immunity approach.Various epidemiologist argue for the stance of Herd Immunity, but as Erdbrink and Anderson tell, Sweden's policy was trust in their people.Herd Immunity is a scientific based process, but Sweden's decisions were based on more than that.They were solidified in their people, their values, and their culture.Moreover, the country has emplaced rules of no >50 people, whereas in the U.S. we stand at 10.So though the authors evaluate the relevant and irrelevant costs within the U.S., I think the bigger takeaway is how each of the two countries analyzed their risk of cost vs. benefit in combating the curve or ignoring it.It is apparent as the article suggest that social, market and economic norms have drastically shifted from our expected daily life.Yet, as illustrated in the 1% death rate, is > 1 million lives worth normalcy, or with caution will we ever return to normal?