Winning the Hardware Software Game Winning the Hardware-Software Game - 2nd Edition

Using Game Theory to Optimize the Pace of New Technology Adoption
  • How do you encourage speedier adoption of your product or service?
  • How do you increase the value your product or service creates for your customers?
  • How do you extract more of the value created by your product or service for yourself?

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moral hazard

  • Actions Have Consequences

    I often turned to my father for advice. I would ask him, “What’s the right decision to make?” And he would invariably reply, “There’s no right or wrong. There are only consequences.”

    By taking the morality out of the equation, my father forced me to focus not on the action itself, but rather on the outcome of the action: Which action would get me to the best overall outcome?

    This taught me that actions have consequences. More than that, though, he taught me that since we choose our actions, we control (to a greater or lesser extent) our outcomes. Since the outcomes we get follow from the actions we take, we should then be led to choose those actions that end up benefitting us.

    Situations Can Be Complicated

    It can get complicated, though. Suppose we’re given the choice of whether or not to eat a big, gooey, glazed donut. Eating the donut will give us pleasure now as we consume it. However, it will also cause angst the next time we want to wear our tight jeans. Or farther down the road, the donut may be the final straw in causing a heart attack, which will not only be traumatic, but also expensive. What do we do?