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Testing the rationality assumption using a design difference in the TV game show 'Jeopardy'

Author

Listed:
  • Sjögren Lindquist, Gabriella

    (Swedish Institute for Social Research, Stockholm University)

  • Säve-Söderbergh, Jenny

    (Swedish Institute for Social Research, Stockholm University)

Abstract

This 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.

Suggested Citation

  • 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, Stockholm University, Swedish Institute for Social Research.
    • Handle: RePEc:hhs:sofiwp:2006_009
    as

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    File URL: http://www.sofi.su.se/content/1/c6/03/09/74/WP06no9.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Rationality; Bounded Rationality; Field Experiments;
    All these keywords.

    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

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