The best rule of thumb is: "the heaver the cord the better." You will find that the extension cords are normally available from about 18 AWG (smaller size wire) to 10 AWG (larger size wire) in size with lengths that may vary from as little as 6 feet to over 100 feet.  Of course cost is a function of length and wire size so the larger the wire size and the longer the cord, the more it will cost.  The reason the heaver cord is a better choice is that it will allow you more flexibility in what you connect to the cord without damage up your power tool or the extension cord. What happens when a cord is undersized is that not enough electricity will flow though it due to resistance, which will cause the cord to heat up, sometimes to dangerous levels where the shielding on the cord melts and can cause a short circuit or fire. Another thing that can happen when you have an undersized extension cord, is that the power tool that you are using, may require a certain number of volts and amps in order for the motor to function properly. Now if the cord is undersized, the tool will have to work harder and in some cases this can damage the power tool.