A Good Example of Targeted Marketing

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The advertisement in Harlem is an excellent example of targeted marketing.

Risk aversion measures how willing you are to accept a bargain where the outcome is uncertain (but potentially more rewarding) compared to a bargain where the outcome is certain (but less rewarding). Statistically, the more money a person makes, the more risk-averse he is.

Therefore, poor people are more willing to take gambles with high degrees of uncertainty, but also high potential pay-offs. Thus, a lottery advertisement in Harlem – a neighborhood popularized for its extreme poverty and high crime rates – seems well-targeted to an audience willing to take the gamble with extremely unfavorable odds.

Kudos for the tip to Dobovo.com, the source of Kiev accommodation

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