Testing the rationality assumption using a design difference in the TV game show 'Jeopardy'
AbstractThis paper empirically investigates the rationality assumption commonly applied in economic modeling by exploiting a design difference in the game-show Jeopardy between the US and Sweden. In particular we address the assumption of individuals’ capabilities to process complex mathematical problems to find optimal strategies. The vital difference is that US contestants are given explicit information before they act, while Swedish contestants individually need to calculate the same information. Given a rationality assumption of individuals computing optimally, there should be no difference in the strategies used. However, in contrast to the rational and focal bidding behaviors found in the US, the Swedish players display no optimal behavior. Hence, when facing too complex decisions, individuals abandon optimal strategies.
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Bibliographic InfoPaper provided by Swedish Institute for Social Research in its series Working Paper Series with number 9/2006.
Length: 28 pages
Date of creation: 28 Dec 2006
Date of revision:
Publication status: Forthcoming as Sjögren Lindquist, Gabriella and Jenny Säve-Söderbergh, 'Testing the rationality assumption using a design difference in the TV game show 'Jeopardy'' in Applied Economics.
Rationality; Bounded Rationality; Field Experiments;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-13 (All new papers)
- NEP-CBE-2007-01-13 (Cognitive & Behavioural Economics)
- NEP-EXP-2007-01-13 (Experimental Economics)
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