https://macropaperwarehouse.com/authors/levent-ulku/Levent ÜlküHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/choice-and-opportunity-costs/https://macropaperwarehouse.com/papers/choice-and-opportunity-costs/<p>This paper develops a unified choice-theoretic framework in which agents evaluate alternatives not in isolation but relative to their opportunity costs — the alternatives they forgo. The central departure from classical theory is the relaxation of additive separability between benefits and costs. In the standard additive model, accounting for opportunity costs is behaviourally equivalent to simple utility maximisation: a decision maker who correctly perceives the feasible set and maximises an additively separable utility will make identical choices whether or not opportunity costs are explicitly considered (the paper calls this the irrelevance of opportunity costs under additivity, formally establishing it as a general result). Once additive separability is relaxed, however, opportunity costs become non-trivial and generate a genuinely distinct theory of choice.</p>