Institutional Law and Economics: The Legal-Economic Nexus

From Samuels and Schmid-see number 9 through 11:

Opportunity Cost It is easy to argue that the idea of opportunity cost is fundamental to any understanding of economic thinking.  It can easily stated as "the cost incurred by not enjoying the benefits associated with another alternative". It is what we gave up to enjoy the decision we do make.  The traditional model makes opportunity cost an objective concept meaning that an outside observer can measure and identify it separate from the decision maker. This is known as the objective opportunity cost theory. James Buchanan and Subjective Opportunity Cost James Buchanan wrote a thin volume about opportunity cost in economics in 1969 called "Cost and Choice".  In the book, Buchanan makes the case that cost is a concept that is in the mind of the decision maker only and cannot be truly understood by an outside observer.  Cost cannot be measured or grasped by an outside observer.  He also makes the case that the concept of choice and cost is forward looking an...