An empirical investigation into the propensity of reckless decision making within the high pressure environment of Deal or No Deal.

Whittle, Richard and Rae, Jonathan and Pyke, Chris (2015): An empirical investigation into the propensity of reckless decision making within the high pressure environment of Deal or No Deal.

Abstract

This paper discusses human attitudes towards risk and the development of expected utility models, laying the foundations for the creation of prospect theory in 1979. It proceeds to analyse the decisions of contestants on the popular TV game show Deal or No Deal to attempt to observe any evidence of differing levels of risk aversion under losses and gains as predicted by prospect theory. The results reveal some evidence of decreased risk aversion in the domains of losses and gains, with contestants displaying behaviour consistent with the break-even and house-money effects. We conclude there may be enough evidence of variable reference points to warrant further investigation, and propose suggestions for further research

• Item Type: MPRA Paper
• Language: English
• Keywords: Decision making under uncertainty, behavioural economics, behavioural finance, biases & heuristics, Prospect Theory.
• Subjects: C - Mathematical and Quantitative Methods > C0 - General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments

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