An Introduction to Opportunity Cost

From Wikipedia, opportunity cost is a term used in economics, to mean the cost of something in terms of an opportunity foregone (and the benefits that could be received from that opportunity), or the most valuable foregone alternative. For example, the opportunity cost of spending a Friday night drinking with your friends could be the amount of money you could have earned if you had devoted that time to working overtime. This does not always mean something of monetary value, just anything that is of any value to the subject in question.

I was planning on buying a large screen television, but I read somewhere (I can't find the site now) that the price for televisions was likely to drop significantly (some estimate by 50%) over the next two years, as newer technology (OLED or LCoS or something like that) displaces the high end, decreasing the demand for the current stuff, and thus decreasing it's price.

I was in the market for a $3000CDN television, so a 50% price drop would save me around $1500. The question is, is $1500 worth the opportunity cost of not being able to play my consoles? The reason I wanted a TV in the first place was that my XBox and PS2 are sitting on my bedroom floor collecting dust. In two years, the XBox 3 and PS4 will be out, and my previous generation consoles (N64, PS1) aren't exactly in a playable condition anymore, nevermind the consoles I owned two years ago.

The other alternative is to sell my consoles, and forget about the whole tv thing for two years, but I'm not sure I want to part with my Japanese PS2, which holds some (minor) sentimental value to me.

 
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