When you start applying game theory to business, the first question to ask is "what are everyone's incentives?" For example, when you buy insurance, you are trying to limit your risk in the event of a low-probability but very high cost event. An insurance provider on the other hand is interested in making as much profit as possible. They accomplish their goal by increasing total premium payments (rate * customers) while limiting how much they pay back out.
When incentives are misaligned, things that "don't make sense" from your point of view happen more frequently. If you have a car accident, from your perspective this is exactly why you bought insurance. From the insurance companies perspective, they would like to keep you as a customer in the future if the cost of fixing this accident is low enough1. If the cost is higher though... they'd rather make it as difficult as possible for you to get a pay out.
My recent experience with this was that I rented a car from a company I won't name here. Most of the experience went well, which seems to be hard to come by for rental car companies. Except, I forgot my GPS in the car. Since it is clear that the GPS would have been found on cleaning the car, I reported a lost item, and the value of a GPS is pretty low by comparison to any future rentals, you might expect that it would have been returned. However, their are four players in this situation. Me, the car rental company, the specific rental location, and the person actually cleaning the car. It clearly benefits me to get my GPS back. It benefits the car company if I choose to use them again. It benefits the specific rental location considerably less than HQ in expectation. And it benefits the person cleaning the car to have a bonus GPS unless there are negative repercussions to them.
In short, a new GPS is purchased and on the way to me. I don't plan on using this rental company again, but I much more strongly don't plan to forget things in the car next time.
1 The benefit of you staying a customer also includes any word-of-mouth generated by how the incident is handled.↩
When incentives are misaligned, things that "don't make sense" from your point of view happen more frequently. If you have a car accident, from your perspective this is exactly why you bought insurance. From the insurance companies perspective, they would like to keep you as a customer in the future if the cost of fixing this accident is low enough1. If the cost is higher though... they'd rather make it as difficult as possible for you to get a pay out.
My recent experience with this was that I rented a car from a company I won't name here. Most of the experience went well, which seems to be hard to come by for rental car companies. Except, I forgot my GPS in the car. Since it is clear that the GPS would have been found on cleaning the car, I reported a lost item, and the value of a GPS is pretty low by comparison to any future rentals, you might expect that it would have been returned. However, their are four players in this situation. Me, the car rental company, the specific rental location, and the person actually cleaning the car. It clearly benefits me to get my GPS back. It benefits the car company if I choose to use them again. It benefits the specific rental location considerably less than HQ in expectation. And it benefits the person cleaning the car to have a bonus GPS unless there are negative repercussions to them.
In short, a new GPS is purchased and on the way to me. I don't plan on using this rental company again, but I much more strongly don't plan to forget things in the car next time.
1 The benefit of you staying a customer also includes any word-of-mouth generated by how the incident is handled.↩
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