Saturday, July 03, 2010

Incentives mechanics

Can people be treated as a mechanics?

Animals can. 

when we have 2 choices, we will pick up the most valuable one, or the better one, according to our utility function. we tend to spend less and get more. say, the price of a can of coke is cheaper then a bottle of milk, and the satisfaction (or the utility ) is the same for me,  i will take the coke, coz i can spend less but get higher satisfaction. when the coke is $1 and the milk is $2, and and now, i prefer milk more, then i may take the milk. In such a case, when a problem exist a optimum solution via analysis, i will like the call : Un-choos-able Choice. quot from Shakespeare: be or not to be, it is not a question. 

an indifferent choice raised when the 2 choices are same cost and the satisfactions also the same. Then, i will call this is a Indifferent Choice.

Like everything, there is a margin for uncertainty. for example, a red dress is $100, a green dress is $101. can we really "feel the different"? are we so sensitive for a small different. how many people can really tell the different between following number" 

1/2, 2/3, 3/4, 4/5, 5/6, 2/5, 3/5...

unless we changed to digital number.

0.50, 0.67, 0.75, 0.80, 0.83, 0.40, 0.60

OK, what am i talking about this? 

the reason is, we act according to different situation, different feed-back, different input. For those Un-choos-able Choice, there is no freedom at all, (unless we are stupid ).

Even for those Indifferent choice, we can increase the incentive, then we can make it be a Un-choos-able choice. 

We all be driving by the incentive. 

unless the assumption is not correct : we do not tend to spend less and get more. 

is it the beginning of moral? How about sacrifice?

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