Concept: cost-benefit analysis

Cost-benefit analysis involves, whether explicitly or implicitly, weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option. Rational agents are assumed to never take an action for which the expected benefits are less than the expected costs.


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The Baby Shower

cost-benefit analysis | economics of crime | incentives | thinking at the margin

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The Barber

cost-benefit analysis | dominant strategy | game theory

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The Chicken Roaster

cost-benefit analysis | externality

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The Contest

cost-benefit analysis | rate of time preference

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The Parking Garage

competition | cost-benefit analysis | rationality

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The Parking Garage

common resource | cost-benefit analysis | thinking at the margin