The Relevance of Subjective Costs: Comment: I. Introduction

In a recent contribution to this Journal, Vaughn [5, 714] argues that "the only interpretation one can give to the concept of opportunity cost as the value of the next best alternative is a subjective one", and suggests that the further we move away from perfectly competitive markets in real world settings, the less likely are prescriptions for efficient resource use based on market-revealed "costs" to be the correct ones.