Decision Sciences
4 years ago

Contestants' Risky Choices on Game Show Influenced by Previous Outcomes

American Economic Review
Deal or No Deal? Decision Making under Risk in a Large-Payoff Game Show
Thierry Post, Martijn J. van den Assem, Guido Baltussen, Richard H. Thaler

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Contestants on the game show "Deal or No Deal" make risky decisions based on past outcomes rather than expected values. Winning or losing earlier in the game affects their risk-taking behavior. This challenges the traditional idea of expected utility theory. The choices are influenced by reference points and past experiences, even when dealing with large sums of money.