Nubblies.net Forums - Wtf Did You Google To End Up Here? - View Single Post

05-23-2006, 03:32 PM

I cannot help but be fascinated by the NBC game show “Deal or No Deal.” For those of you who are unfamiliar with this show, the format is as follows:

Contestant randomly selects a briefcase among a good number of briefcases (20-30, I forget how many). For the remainder of the show, this will be the contestant’s briefcase. In each briefcase is a different monetary value ranging from $.01 to $1,000,000.

The trick is that the contestant never knows (until the end) the value in his/her briefcase, but is allowed to open other briefcases to discover what values the briefcase does not contain. After each round of opening cases, a “banker” will make an offer to purchase the contestants briefcase for a certain sum. These offers are part of what makes the game interesting to watch.

When an offer is made, the player is given the choice to take the offer and end the game, or to continue selecting briefcases and revealing more information. Should briefcases that are opened contain high values (thus, the high values could not be in the contestant’s briefcase), the subsequent offer will decrease and visa versa.

Now what I find intriguing is this: at each step of the game it would be possible to calculate the expected value of the cases and determine whether the offer is higher or lower than the expected value (in the first couple rounds, the offer is always significantly lower). But in greater rounds, some players will turn down offers which are greater than the expected value: they are truly gambling with large sums. This is strange (if not irrational behavior for someone who would have a good use for the money). For example: The available values may be: $25,000 $50,000 $100,000 and $1,000,000. The average of these values is $293,750… but the player may turn down and offer of $350,000 in hope that they will eliminate yet another low value, or have the $1,000,000 value in their case.

As it turns out I’m not the only one interested in this topic, I found a very interesting academic paper written about the behavior of contestants on the European versions of this show. I’ve read about half so far, and it wonderfully explains why people do not always act as we predict they will:

http://papers.ssrn.com/sol3/papers.c...ract_id=636508

Anybody else watch this show and enjoy it (or just find it interesting) as I do?

05-23-2006, 03:32 PM	#1 (permalink)
DJ FC Guest Posts: n/a	Deal or No Deal I cannot help but be fascinated by the NBC game show “Deal or No Deal.” For those of you who are unfamiliar with this show, the format is as follows: Contestant randomly selects a briefcase among a good number of briefcases (20-30, I forget how many). For the remainder of the show, this will be the contestant’s briefcase. In each briefcase is a different monetary value ranging from $.01 to $1,000,000. The trick is that the contestant never knows (until the end) the value in his/her briefcase, but is allowed to open other briefcases to discover what values the briefcase does not contain. After each round of opening cases, a “banker” will make an offer to purchase the contestants briefcase for a certain sum. These offers are part of what makes the game interesting to watch. When an offer is made, the player is given the choice to take the offer and end the game, or to continue selecting briefcases and revealing more information. Should briefcases that are opened contain high values (thus, the high values could not be in the contestant’s briefcase), the subsequent offer will decrease and visa versa. Now what I find intriguing is this: at each step of the game it would be possible to calculate the expected value of the cases and determine whether the offer is higher or lower than the expected value (in the first couple rounds, the offer is always significantly lower). But in greater rounds, some players will turn down offers which are greater than the expected value: they are truly gambling with large sums. This is strange (if not irrational behavior for someone who would have a good use for the money). For example: The available values may be: $25,000 $50,000 $100,000 and $1,000,000. The average of these values is $293,750… but the player may turn down and offer of $350,000 in hope that they will eliminate yet another low value, or have the $1,000,000 value in their case. As it turns out I’m not the only one interested in this topic, I found a very interesting academic paper written about the behavior of contestants on the European versions of this show. I’ve read about half so far, and it wonderfully explains why people do not always act as we predict they will: http://papers.ssrn.com/sol3/papers.c...ract_id=636508 Anybody else watch this show and enjoy it (or just find it interesting) as I do?
DJ FC Guest Posts: n/a