Or at least somebody should be taping this new game show Deal or No Deal so they can write a paper about it.
On the show, contestants get a suitcase with some amount of money in it and they get to keep the contents or take a certain offer that some “banker” on the phone is offering. A good chance to test risk aversion. They even help the home audience by putting up some key numbers on the screen (“She has a 13% chance of winning a million dollars.”) It is a great opportunity to test risk aversion at high stakes, subject to the distortion induced by being on national TV with a live audience screaming at you while you make your choices.
My guess: the show will stay on the air long enough to generate enough data for an academic paper to analyze it, but not much longer.
and 
. You can also watch it on 
This particular game show has been on the air in Australia for several years already (http://seven.com.au/seven/dealornodeal ; also http://en.wikipedia.org/wiki/Deal_or_No_Deal)
The top prize is only A$200,000, though, and the odds of winning it are not explictly mentioned during the show.
This particular game show has been on the air in Australia for several years already (http://seven.com.au/seven/dealornodeal ; also http://en.wikipedia.org/wiki/Deal_or_No_Deal)
The top prize is only A$200,000, though, and the odds of winning it are not explictly mentioned during the show.
Yes Wafonso, but you must remember that Americans are like no other. If they sit down after work to watch a game show, only to find out that numbers are popping up on the screen and that weird “%” symbol is floating around….well, lets just say that unintelligible letters will be written.
Yes Wafonso, but you must remember that Americans are like no other. If they sit down after work to watch a game show, only to find out that numbers are popping up on the screen and that weird “%” symbol is floating around….well, lets just say that unintelligible letters will be written.
May I ponder…I’ve seen Freakonomics in every book store I’ve walked into, right by the front door. Dare we caculate the influx of new user profiles created for bloggers who are reciving the book as a Christmas gift?
May I ponder…I’ve seen Freakonomics in every book store I’ve walked into, right by the front door. Dare we caculate the influx of new user profiles created for bloggers who are reciving the book as a Christmas gift?
I watched the last 1/3 of it last night. At first, I thought it was kind of dumb (the woman who was on stage was very irritating!) but I started to get swept up into the whole behavioral economics side of it. If you think fast enough, you can calculate the expected value of the payoff.
I think that the show also shines a huge spotlight on the concept of utility. At the end of the show, the woman had to choose betweeen a certain $72,000 payout or an uncertain payout with an expected value of >$150,000. The ‘rational’ choice is to hold out for the big payoff, but what if the contestant only makes $36,000 per year? I’m sure that two years’ pay could do her a lot of good. On the other hand, a lawyer or investment banker might hold out for the big money, considering the ‘loss’ of $72,000 may not have any impact to their livelihood.
I watched the last 1/3 of it last night. At first, I thought it was kind of dumb (the woman who was on stage was very irritating!) but I started to get swept up into the whole behavioral economics side of it. If you think fast enough, you can calculate the expected value of the payoff.
I think that the show also shines a huge spotlight on the concept of utility. At the end of the show, the woman had to choose betweeen a certain $72,000 payout or an uncertain payout with an expected value of >$150,000. The ‘rational’ choice is to hold out for the big payoff, but what if the contestant only makes $36,000 per year? I’m sure that two years’ pay could do her a lot of good. On the other hand, a lawyer or investment banker might hold out for the big money, considering the ‘loss’ of $72,000 may not have any impact to their livelihood.