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WillieWonka
Guest
Sure.Please define “behavioral cost” for me…
Suppose I am buying a lawnmower and one is $100, and the other is $200. They both seem the same - same size, weight, power, etc. However, with the $100 model I have to mix oil with gas before filling the tank. That is what economists call a transaction cost.
Two health clubs may charge the same, but one has a parking lt right by the door and at the other customers must park a block away. That one block walk each way is a transaction cost.
Maybe two medicines have the same effect. One costs $100 and the other costs $200. But, with the $100 medicine, the patient can’t drive for two hours after taking the medicine. That loss of two hours potential driving is a transaction cost.
So, let me MAKE UP some completely FICTIONAL transaction costs for NFP vs pill for examples. With the pill a woman has cramps for a week every month. With NFP a woman must spend an hour doing calculations everyday. Each would be a transaction cost for use of that product