Per the Nielsen Norman Group, interaction cost is the sum of efforts — mental and physical — that the users must deploy in interacting with a site/application in order to reach their goals. The formula for interaction cost is IC = P + M (interaction cost = physical + mental effort). It's not worth reducing P by a small amount if the corresponding M becomes much larger. A good example of interaction cost is navigation in your design. If you plan on having a shallow navigation where many items are listed, then the physical effort to continually returning to it to may out weigh the mental effort. However if you run a card sorting study and determine that can group certain navigation items together, then you will reduce the physical effort and keep the mental effort at a similar level.
http://www.nngroup.com/articles/interaction-cost-definition/
