Questions about Behavioral decision-making and employee stimulation
Assignment ID Number AFFGEHU83939HD Type of Document Essay Writing Format APA/MLA/Harvard Academic Level Masters/University References/Sources 4 References
1st long question (10 points)
A manager applied a proposed incentive program to a group of workers with the lowest productivity to see if it would increase productivity. Their productivity did indeed increase a month later. Give five plausible reasons for the rise in productivity. (2 points for every logical explanation found)
2nd long question (10 points)
Airlines frequently charge higher fares during peak seasons (such as the summer) than during off-peak seasons (such as the winter). The majority of customers think this practice is reasonable and do not object. Assume you own a small store and are the only one in the area that sells face masks.
Due to the recent COVID pandemic, there has been a significant increase in demand for face masks, and you have doubled the mask’s price. Many residents bought masks from you because they had no other option. They were, however, enraged and thought you were being unfair. Your store’s reputation has been severely harmed. Please list the key differences between what you did and what airlines do that you believe account for the disparity in consumer reactions in the two cases.
3rd long question (10 points)
You’re the CEO of a software development firm. Many people illegally copy your software from their friends and relatives rather than purchasing it. Propose two designs or strategies to make users feel more guilty if they copy your software. Psychological principles should be used to develop the strategies. For this question, lowering the price of your software, for example, is not an acceptable strategy.
4th long question (10 points)
Toro began making tractor engines in 1914 and later expanded into lawn mowers. They added snow throwers in the early 1960s. By 1984, they had a complete line of “outdoor care” products for both institutional and residential customers. Residential lawn care products accounted for about 40% to 50% of sales, with snow throwers accounting for another 10% to 15%.
Snow thrower sales were routed through twenty-six regional distributors, who distributed snow throwers to independent retailers across the country, including hardware stores and lawn and garden centers.
the arctic circle (a number of regions near the Great Lakes in North America where heavy snowfall in the form of lake-effect snow is particularly common). Toro also sold snow throwers directly to mass merchandisers such as Marshall Field, whose private labels accounted for about 30-35 percent of Toro’s snow thrower sales. Despite the fact that snow throwers were sold all year, 60-70 percent of sales occurred in November, December, and January, with sales dropping off in the following months and becoming non-existent in the summer. Sales were particularly strong in the year after a particularly harsh winter, presumably because people resolved not to be “caught again.”
Toro’s product line included the lightweight power shovel, as well as single-stage and two-stage models. With suggested retail prices ranging from $270 to $440, the (smaller) single-stage machines were selling in excess of 100,000 units per year. The self-propelled two-stage machines, which cost between $640 and $1500, were selling at a rate of around 20,000 units per year.
These figures were a far cry from the heady days of the late 1970s, when several years of strong growth culminated in two years of exceptionally high sales, 1978-1979 and 1979-1980. Toro sold about 800,000 single-stage machines and 125,000 two-stage machines during that time. The three harsh winters that began in 1977-1978 created a demand that rewarded dealers for their aggressive inventories.
1980-1981 sales plummeted the following year. Dealers and distributors were left with unsold inventories that lasted up to three years in some cases. Toro not only had to forego the lost revenue as orders dwindled, but they also offered to cover some of their dealers’ massive holding costs. The following two winters were similarly mild, causing Toro’s fortunes to plummet. Snow removal equipment had become a source of dissatisfaction for dealers. The future looked bleak.
1) Why were consumers hesitant to buy snow throwers in general? (five points)
2) Explain some marketing/promotional strategies Toro could employ to boost sales. (five points)
5th long question (10 points)
You’re debating whether or not to invest $180,000 in a product development R&D project. There is a 50% chance that the project will be a success. If the project is successful, the company can choose between constructing a $400K large plant or a $200K small plant. The product’s market size could be large (with a 50% chance), medium (30%), or small (with a 10% chance).
a possibility), or a minor (20 percent probability). Over the life of the plant, the present value of net cash flows corresponding to sales in a large, medium, and small market is $1000K, $500K, and $500K, respectively.
Each is worth $250,000. A small plant, on the other hand, can only handle a small or medium market size, not a large one; in other words, the net cash flow in a large market is the same as it is in a medium market for a small plant.
1) Create a Decision Tree to represent these options. (eight points)
2) Determine 1) whether to invest in a large or small plant (2 points), and 2) whether to invest in this project at all based on the Decision Tree analysis (2 points).
Question 6 is a lengthy one (20 points)
Mike is a fisherman who lives on a small island in the middle of nowhere. He’s deciding between three possible jobs for today: A) working for a local store, with a guaranteed salary of HK$400; B) fishing in a small river near his home, where he could make either 0 (and no loss) or HK$1000 with equal probabilities; or C) fishing in the sea, where he could lose HK$200 (e.g., the cost of the boat) or make HK$1500 with equal probabilities.
Assume Mike’s expected utility (EU) function is x0.5, with x>=0, and his prospect theory (PT) value function is x0.5, with x>0, and she is twice as sensitive to a loss as she is to a gain of the same size. Mike’s probability of events weighting function is the same as his PT weighting function.
Which option will Mike choose if he is an expected value maximizer? Calculations to back up your conclusion (3 points).
If Mike’s current wealth is worth HK$100, what are EU(A), EU(B), and EU(C)? If Mike is an expected utility maximizer, which option will he choose based on the calculation? (three points)
6.3 If Mike’s current wealth is HK$300, what are EU(A), EU(B), and EU(C)? If Mike is an expected utility maximizer, which option will he choose based on the calculation? (You get 2 points)
6.4 If Mike’s current wealth is HK$2000, what are EU(A), EU(B), and EU(C)? If Mike is an expected utility maximizer, which option will he choose based on the calculation? (You get 2 points)
6.5 Assume Mike has just arrived on the island with HK$100 in his pocket and a daily living cost of HK$320. What kind of career path would you recommend for Mike based on your analysis of results from 6.2, 6.3, and 6.4 (assuming Mike is an expected utility maximizer)? (four points)
6.6 If Mike’s current wealth is worth HK$100, what are Prospect Theory V(A), V(B), and V(C)? If Mike is a PT utility maximizer, which option will he choose based on the calculation? (3
6.7 If Mike’s current wealth is HK$2000, what are Prospect Theory V(A), V(B), and V(C)? If Mike is a PT utility maximizer, which option will he choose based on the calculation? (three points)
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper.
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