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Prospect theory reveals optimal strategies for sequential experiences. Designing news releases, events, and series releases depends on audience sensitivity to gains and losses for better decision-making.

Keywords:
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Area of Science:

  • Behavioral Economics
  • Decision Science
  • Experience Design

Background:

  • Prospect theory is a cornerstone of behavioral economics, explaining how individuals make choices under uncertainty.
  • Understanding decision-making in sequential experiences is crucial for effective design in various industries.

Purpose of the Study:

  • To develop a general framework using prospect theory for designing sequential experiences.
  • To apply this framework to three distinct experience design settings: news release, event organization, and series release.

Main Methods:

  • Formulation of a general framework based on prospect theory.
  • Application and analysis of the framework in three specific case studies.
  • Characterization of optimal strategies based on audience characteristics (gain-seeking, loss-averse).

Main Results:

  • Optimal strategies for releasing good/bad news involve initial negative/positive sentiment disclosure for gain-seeking audiences.
  • Event organization can benefit from alternating pleasant and aversive performances (interior peaks) for both gain-seeking and loss-averse audiences.
  • Series release strategy (simultaneous vs. sequential) depends on audience loss sensitivity: sequential for low sensitivity, simultaneous for high sensitivity.

Conclusions:

  • Audience sensitivity to losses relative to a reference point is a key determinant in designing sequential experiences.
  • Prospect theory provides valuable insights for optimizing decision-making in experience design.
  • The findings offer practical guidance for firms managing sequential content and experiences.