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Richard Thaler is one of a few behavioral economists who have expanded their study of game theory to include television game shows. What Thaler, Ralph and Dorothy Keller Distinguished Service Professor of Behavioral Science and Economics, and others are studying is the choices contestants make as they play “The Price is Right, “Jeopardy” or “Who Wants to Be A Millionaire?” Those choices are then used to develop theories about how individuals may make economic decisions in regular lives.
The newest show to spark the interest of economists is “Deal or No Deal,” a game that involves pure chance. That makes it a particularly attractive show to analyze risk and decision making., Thaler notes, according to the Wall Street Journal. “There is no doubt that these are real people making real choices for high stakes, and we rarely get to observe such pure decisions,” he told the Journal.
Game shows offer economists a way to gain valuable data without having to spend a dime. After all, what research foundation or government agency would authorize millions of dollars to create an experiment that duplicates a game show? The information on decision making that game shows provide can help shed light on such matters as what to invest your pension funds in or how much a government should spend on a social program.
Read “Economists hooked on new game show” in the Wall Street Journal to learn more.
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