Prospect Theory
Wednesday, 5 October 2011
today's performance lecture was discussing about pricing, life cycle costs, & target costing. the teacher was talking about pricing strategy, which reminded me with my marketing subjects. lol. yes, today's lecture was much about marketing instead of accounting, no calculations were actually discussed. instead, we were discussing about the market strategy.
what attracted me the most is about Prospect Theory. It's a theory that incremental gain will eventually become less pleasurable, and incremental losses will eventually become less painful. the teacher gave one example about a gambler. when he lose his first $100, he may feel sad and hurt, however, he will play again by thinking that, since he already lost $100, losing another $100 won't be a big issue. hmm this new theory awakes me that, gambling is not about addiction. it's just about your feeling that makes you want to play it again and again. this is also true for gain. the first time you receive $100 from someone, you might feel very grateful and happy about it. however, the next time you receive another $100, you might not feel as grateful as before.
I think this theory is very logical and true. for someone who is healthy, to be able to breathe is normal. there is no surprise about it, and he/she might not realise that he/she must be grateful about it. Instead, for someone who has been sick for a long time, who need oxygen tank to be able to breathe, when he/she becomes healthy and can breathe freely without the oxygen tank. that person will be very grateful and happy. he/she might cry happily because of this. however, when you look at her/him the next few months, he/she will forget about the happiness that heh/she felt before. he will just feel normal and nothing great to be able to breathe. just like what other healthy person feel. I think this is why God asks us to always be grateful for what we had. the thing that we might think normal/ordinary might become extraordinary to others. we need to be grateful for what we have today.
Ima says "Have a nice day... =)"