Prospect theory and gains/losses integration/segregation
RicharThaler's classic paper describes "Prospect theory" by Kahneman and Tversky and discusses mental accounting and psychology

of decision making of monetary decisions.
These are the paper's details:
Thaler, Richard (1985) "Mental accounting and consumer choice" Marketing Science volume 4 no 3. Pp 199-214
Your assignment should take up to 3 pages, font 12, space 1.5
1. Read the paper. There is no need to get into the formulas. You should understand the utility function graph, its'

applications and the model presented by Thaler.
a. Describe the features of the utility graph and explain the principals of Prospect theory in your own words (pp 200-201).
b. Describe and explain the four combinations of gains and losses offered by Thaler.
2. Look for 2 examples of promotions or marketing offers that are related to retail, and demonstrate a good application of

two of the losses/gains integration/segregation combinations. Describe each such promotion, add a photo if possible. Who is its'

target market, how is it framed and how does it correctly apply the gains/losses principles in order to create attractiveness of

the offer to the customer.
3. Describe 2 promotions/marketing offers which demonstrate wrong application of the combinations of gains/losses (add a

photo if possible). Where did they go wrong? How would you improve them using Thaler's principles in order to increase their

appeal?