Zero Sum Games and Insurance | Lessons From the Fire | Behavioral Economics in Marketing
Oct 20, 2022
They unpack zero-sum games and what it means when one person's gain equals another's loss. Chess and poker are used as sharp examples of competitive payoff thinking. Insurance and extended warranties are examined through pricing, risk assessment, and why people still buy them. Personal reflections on recovery after a major fire tie the ideas to real-world consequences.
06:28
forum Ask episode
web_stories AI Snips
view_agenda Chapters
auto_awesome Transcript
info_circle Episode notes
insights INSIGHT
Zero-Sum Games Redistribute Value
A zero-sum game redistributes wealth so one player’s gain equals another’s loss.
Games like chess and poker illustrate that total wealth stays constant while distribution changes.
question_answer ANECDOTE
Extended Warranties Rarely Pay Off
Sandra uses retail warranties and TV extended plans to show how insurers price risk precisely.
She points out coverage rarely pays off and customers often upgrade before a malfunction occurs.
insights INSIGHT
Insurance Profits From Accurate Risk Pricing
Insurance firms profit because they can accurately assess and price clients' risk.
Pricing reflects expected payouts, so insurers win on average by setting the premium correctly.
Get the Snipd Podcast app to discover more snips from this episode
Mathematicians, economists and analysts use the term zero-sum game throughout game theory and economic theory to describe a competitive situation wherein the profit of one equals the loss of another and vice-versa, thereby nullifying the net change in wealth for participants involved.
Behavioral Economics in Marketing Podcast | Understanding how we as humans make decisions is an important part of marketing. Behavioral economics is the study of decision-making and can give keen insight into buyer behavior and help to shape your marketing mix. Marketers can tap into Behavioral Economics to create environments that nudge people towards their products and services, to conduct better market research and analyze their marketing mix.
Sandra Thomas-Comenole | Host | Marketing professional with over 15 years of experience leading marketing and sales teams and a rigorously quantitative Master’s degree in economics from Rensselaer Polytechnic Institute. Check out her Linkedin profile here: Sandra Thomas-Comenole, Head of Marketing, Travel & Tourism
Lessons From the Fire | Lessons From the Fire, Season 5 of the Behavioral Economics in Marketing podcast will be dedicated to those that along with our family lost everything in the Marshall Fire in Boulder, Colorado, as well as to those that have been affected by natural disasters. My hope is that listening to this season of the Behavioral Economics in Marketing podcast will help others in their healing process. But I also believe that this season will be full of marketing wisdom for marketing professionals and business leaders.
The Behavioral Economics in Marketing’s Podcast