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To Spin or Not to Spin? Natural and Laboratory Experiments from "The Price is Right"

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Author Info

  • Rafael Tenorio

    (De Paul University)

  • Timothy N. Cason

    (Purdue University)

Abstract

"The Wheel" is a sequential game of perfect information played twice during each taping of the television game show "The Price is Right". This game has simple rules and the stakes are high. We derive the unique subgame perfect Nash equilibrium (USPNE) for "The Wheel" and test its predictive ability using data from both the television show and laboratory plays of this game. We find that contestants frequently deviate from the USPNE when the decisions are difficult. The pattern of these deviations is (a) largely independent of the stakes of the game, and (b) consistent with a psychological bias of the omission-commission type. Copyright Royal Economic Society 2002

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 112 (2002)
Issue (Month): 476 (January)
Pages: 170-195

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Handle: RePEc:ecj:econjl:v:112:y:2002:i:476:p:170-195

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References

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  1. Metrick, Andrew, 1995. "A Natural Experiment in "Jeopardy!"," American Economic Review, American Economic Association, vol. 85(1), pages 240-53, March.
  2. Ritov, Ilana & Baron, Jonathan, 1995. "Outcome Knowledge, Regret, and Omission Bias," Organizational Behavior and Human Decision Processes, Elsevier, vol. 64(2), pages 119-127, November.
  3. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July.
  4. Smith, Vernon L & Walker, James M, 1993. "Monetary Rewards and Decision Cost in Experimental Economics," Economic Inquiry, Western Economic Association International, vol. 31(2), pages 245-61, April.
  5. Berk, Jonathan B & Hughson, Eric & Vandezande, Kirk, 1996. "The Price Is Right, but Are the Bids? An Investigation of Rational Decision Theory," American Economic Review, American Economic Association, vol. 86(4), pages 954-70, September.
  6. Cox, James C & Oaxaca, Ronald L, 1992. "Direct Tests of the Reservation Wage Property," Economic Journal, Royal Economic Society, vol. 102(415), pages 1423-32, November.
  7. Rosenthal, Robert W, 1989. "A Bounded-Rationality Approach to the Study of Noncooperative Games," International Journal of Game Theory, Springer, vol. 18(3), pages 273-91.
  8. Noussair, C.N. & Healy, P., 2004. "Bidding behavior in the 'price is right' game: An experimental study," Open Access publications from Tilburg University urn:nbn:nl:ui:12-377939, Tilburg University.
  9. Colin F. Camerer & Richard H. Thaler, 1995. "Anomalies: Ultimatums, Dictators and Manners," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 209-219, Spring.
  10. Bennett, Randall W. & Hickman, Kent A., 1993. "Rationality and the 'price is right'," Journal of Economic Behavior & Organization, Elsevier, vol. 21(1), pages 99-105, May.
  11. Sonnemans, Joep, 1998. "Strategies of search," Journal of Economic Behavior & Organization, Elsevier, vol. 35(3), pages 309-332, April.
  12. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer, vol. 1(1), pages 9-41, June.
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Cited by:
  1. Nicolas de Roos & Yianis Sarafidis, 2010. "Decision making under risk in Deal or No Deal," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(6), pages 987-1027.
  2. John List & David Reiley, 2008. "Field experiments," Artefactual Field Experiments 00091, The Field Experiments Website.
  3. Sjögren Lindquist, Gabriella & Säve-Söderbergh, Jenny, 2006. "Testing the rationality assumption using a design difference in the TV game show 'Jeopardy'," Working Paper Series 9/2006, Swedish Institute for Social Research.
  4. Bruce I. Carlin & David T. Robinson, 2009. "Fear and loathing in Las Vegas: Evidence from blackjack tables," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 4(5), pages 385-396, August.
  5. Paul Healy & John Ledyard & Charles Noussair & Harley Thronson & Peter Ulrich & Giulio Varsi, 2007. "Contracting inside an organization: An experimental study," Experimental Economics, Springer, vol. 10(2), pages 143-167, June.
  6. Fiore, Annamaria, 2009. "Experimental Economics: Some Methodological Notes," MPRA Paper 12498, University Library of Munich, Germany.
  7. John A. List, 2004. "Young, Selfish and Male: Field evidence of social preferences," Economic Journal, Royal Economic Society, vol. 114(492), pages 121-149, 01.
  8. Gee, C., 2007. "Risky Choice and Type-Uncertainty in "Deal or No Deal?"," Cambridge Working Papers in Economics 0758, Faculty of Economics, University of Cambridge.

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