I think you're assuming people are much more rational then they are in practice. Sure, if it were a company calculating all of those things, you'd be right. But I think it's not at all unlikely that a contractor would feel better doing an extra job close by, even for slightly lower pay, and even if they are delaying a slightly higher paying job farther away. Just like consumers have all sorts of biases that mean they don't always act in the most rational way, producers do to - especially individuals and small businesses.