Scientific Definition
Fixed costs don't scale with output; variable costs do.
Plain-English Definition
Fixed costs don't scale with output; variable costs do.
Feynman Explanation
Operating leverage is fixed costs in disguise.
Core Principle
Fixed costs don't scale with output; variable costs do.
Mechanisms
Pending editorial review.
Fixed costs don't scale with output; variable costs do.
Pending editorial review.
Pending editorial review.
Pending editorial review.
Pending editorial review.
Cost structure determines strategy more than strategy determines cost.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
Operating leverage is fixed costs in disguise.
Examples
- Software has high fixed, low variable cost — hence high gross margin at scale.
- Cost structure determines strategy more than strategy determines cost.
Pending editorial review.
Famous Experiments
Pending editorial review.
Design Principles
- Map every line as fixed vs. variable. Re-architect deliberately.
Measurement Approaches
Pending editorial review.
Evidence
Pending editorial review.
Pending editorial review.
The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Map every line as fixed vs. variable. Re-architect deliberately.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
What does it cost to leave?
Exploiting price differences between markets for risk-free profit.
The study of how real humans actually decide — bounded, social, emotional, and inconsistent.
With clear property rights and low transaction costs, parties negotiate to efficient outcomes.
Specialize in what you give up the least to do.
Complements raise each other's value; substitutes lower it.
Innovation destroys old industries and creates new ones.
Each additional unit produces less marginal benefit.
A long-run planner self in conflict with a short-run impulsive self.
Owning something raises its valuation — sellers want more to give it up than buyers will pay to acquire.
Bad money drives out good when both are legally equivalent.
The mythical fully rational, self-interested, utility-maximizing agent neoclassical models assume.