Wednesday, March 29, 2006

Call me a bad person...

but I like watching Deal or No Deal. It's got Howie Mandel, it's basically Press Your Luck without any pretense of thinking, and you get to root against people who turn down really good offers from the bank. Just saw someone turn down 80K when she had a 1K, 5K, 50K and 300K left, pick one suitcase and eliminate the 300K. They just need the Whammy sound.


Sysm said...

You're a bad person.

Happy now?

slappy said...

I'm fairly contented.

Booty J Patrol said...

I like that show too. Apparently in the British version you get to make actual decisions that require some sort of knowledge of probablility, but of course for us stupid Americans they had to make it involve no brains.

You know you can play the game yourself on NBC's website. It's kind of fun. I think the best strategy is to take the bank's offer if you have one of the top 3 ammounts left.

miss kendra said...

i just like to watch people get close to howie mandel because i know inside he's crying out for some antibacterial cleansing wipes.

jiggs said...

What's the right way to calculate the expection?

If you do it the obvious way, it seems like it's better to keep going:

Expectation for taking the case = 80000

Expectation for not taking the case =
300000*.25 + 50000*.25 + 5000*.25 + 1000*.25 = 88000 approximately.

Presumably the producers offer an amount that's some percentage (maybe 90%) of the expectation of what's left.

Tits McGee said...

Spot on, Jiggs.

And no offense, Slappy, but I feel compelled to point out that Deal or No Deal is pretty much not at all like Press Your Luck. And Howie Mandel is no Peter Tomarken, may he rest in peace.

slappy said...

It's got the Whammy effect, where a contestant commits hubris and tries for one more play only to lose it all.

Booty found a good article on the utility curve of money and gambling. Basically, she was putting up about 60K on the line - after she made the wrong pull she was offered 20K - which is an awful lot of money to risk when the expectation value is barely more than your buyout offer.

One extreme is if I offered you $1 million or you could flip a coin and if it came up heads, you got $3 million, tails nothing. Your expectation value is better with the flip, but you'd be some kind of freaking moron to risk it.

slappy said...

There will never be another Peter Tomarkin.

Booty J Patrol said...

I read that the producers offer an ammount somewhere between 95% and 105% of the expected outcome, based on your "demonstrated risk aversion", which I read as "your ability to understand expected outcomes". What I found when doing a few trials on their web based game is that when you have one of the three top numbers left, they seem to offer slightly more than the expected outcome. Of course, I'm not sure if the web based game and the real game are the same. I guess I'll have to watch the game and see how the offers come through as related to the expected outcome.

Although I will say the two times I've seen the show I was really good at guessing when the bank would offer each time.

jiggs said...

slappy, you are risk averse. There is nothing wrong with that, that's just the way it is. You don't want to put substantial amounts of money on the line even when you are expected to make more.

The rational way to play if you are risk neutral is to maximize your expectation.

I'm risk averse myself.

With respect to utility, one thing that bugs me in the argumentation about utility is that people assume a linear utility function. For example, 1.5 million is only 50% better than 1 million.

For some people, however, the utility of 1.5 million could be exponentially higher.

For your coin flip example, imagine a scenario where the person could walk away with the 1 million but that would do them no good because they need 3 million to pay a ransom or something. Even though 1mil is a lot of money, it's utility is 0 to the person playing.

Knitty Kitty said...

I'm addicted to "Deal or No Deal" The Australian version. I like it a lot more because:
a) no Howie Mandel
b) audience members hold the cases so they have a chance at winning for correct guesses as well.

slappy said...

I read about that on the Wiki, that does sound interesting. Is that the version where the contestant holding the case guesses what's in it, and if they're right they win something like $5K?

Do the contestants typically guess high or low? I would think friendly people would go low.

Tumbleweed said...

I miss the Gong show!

slappy said...

Did you ever catch the new Gong show? They had some crazy online voting component where the votes affected this gong icon in the corner of the screen. A glowing blob would grow/shrink and change colors from red to green depending on the votes. Weird. Probably better to watch stoned.