A novel service price equation is advanced to explain how prices in the services market depend on service workers' cognitive time in relation to the actual clock time (physical time) that is contracted for a service. Cognitive time affects service revenues, costs, the targeted service profit, and budgeted service time. The equation shows how the cognitive time of service workers produces a hidden price-lever effect, in which the service price behavior becomes non-linear. A minor difference between the cognitive time and the physical time of a given service generates a significant change in the price level required to realize a targeted service profit. If the workload of a service worker is increased to a certain level, there is a potential service price collapse, implying that the service provider cannot reach the budgeted profit. This collapse condition further advances the emerging literature on behavioral pricing of services.

The present study advances a novel productivity function of knowledge workers. Cognitive science studies provide clear evidence that, for a given event, there is a difference between a worker's cognitive time and physical clock time; this difference gives rise to a cognitive time distortion. The proposed productivity function accounts for workers' dual experiences of time and the kinds of contracts utilized by an economic organization and its customers and workers. This function shows-for the first time and contrary to intuition-that, given certain conditions, workers' cognitive time and the form of contracts utilized are the only conditioners of knowledge worker productivity. The proposed productivity function unearths a hidden economic lever effect whereby a minor degree of time distortion generates a significant level of worker inefficiency. This constitutes a novel contribution to the literature on knowledge worker productivity.

A temporal workload model is introduced to identify the relationship between the work time and economic performance of the activities conducted by a human agent in the context of an economic organization. The model's novelty derives from the account of time perception and its consequent cognitive time distortion, the latter being understood as a discrepancy between physical and cognitive time. Current praxis, both theoretical and empirical, assumes only physical time. This assumption is challenged here through the inclusion of time perception and cognitive time distortion in estimating the temporal workload of an economic agent. This inclusion enables a novel comprehension of frequent operational challenges, such as work delays, human stress, output quality issues, and economic inefficiencies. The main contribution to the literature is a specification of a new condition that governs the performance of any economic organization where human agents conduct time assessments.

This paper addresses specifically leverage effects based on the irreversible nature of time and the Cognitive Time Distortion in economy. In service - and information society, time has received an ever increasing importance, not from the perspective of faster production, but due to the fact that the major part of the economic value of Total Revenues and Total Costs is based on time. In this paper, we demonstrate new mathematical mechanisms in economy due to the irreversible nature of time and Cognitive Time Distortion, and we explore their lever effects. It is presented that the lever effect on return on capital employed may rise to many hundred percent of budgeted outcome. It is concluded that even moderate cognitive time distortions cause substantial deviation in budgeted profit as well as it proves to be a mechanism to large delays. The lever effect due to the time perception is an ever present distortion of a true economic outcome.