Game Theory of The Price is Right: Part 2

In my last post, I discussed some game theory behind the Cliffhangers game on The Price is Right. And while watching the stupidity of Cliffhangers players got me angry, what really got me thinking was the bidding itself.

To get up on stage (which comes with a chance to win bigger prizes), four contestants take turns guessing the value of an item (usually several hundred dollars). The one with the closest guess to the item's actual value, without going over, wins the item and gets to go up on stage.

Frequently, people make really dumb guesses. Someone will bid, say, $420 for an item, and another contestant will subsequently bid $415, giving themselves a $5 window in which to win the item. But more interesting is whether or not contestants decide to bid $1 above someone else. Frequently, someone will bid, say, $475 after another contestant has bid $420. They could have bid $421 (and indeed this does happen, as in the video below), but in the unwritten etiquette of The Price is Right, it's viewed as a low blow.

Game theory of The Price is Right: Part 1

In an attempt to improve my French, I have discovered a newfound appreciation for The Price is Right. Having watched the show as a kid but forgotten about it in recent years, I was excited when a Québecois version of Bob Barker's classic game show was launched this fall. I have found that it is an enjoyable way to keep up my French vocabulary.

It's also the first time that I've watched the show on a regular basis since studying economics, which can make for a surprisingly frustrating experience. For instance, on Cliffhangers (the "yodelling game"), I find myself cringing when contestants make their final bid.

Halloween game theory on The Office

You know you think too much like an economist when…

I was watching The Office last night, and I knew Oscar was going to win the Halloween contest as soon as he threw in the towel and traded in his disco dude outfit for a "rational consumer" costume. For those who didn't see the episode, a bunch of employees were competing for the highly coveted Wilkes-Barre/Scranton coupon book in a Halloween costume contest, and some employees were taking things a little too seriously in hopes of snagging the big prize. Oscar decided everyone was getting too carried away, so to show how ridiculous he thought the whole thing was, he took off his costume and put on his normal clothes, claiming to be dressed as a rational consumer.

Freakonomics takes on the Bible

Those of you who have looked at my links to favourite blogs will know I am an avid reader of the Freakonomics blog. They produce a large quantity of posts, many of which I never read (I have yet to understand what the Yale Book of Quotations has to do with "the hidden side of everything"), but they have some very well-respected bloggers and their posts are usually non-technical and high quality.

But I have been puzzling for a few days now over a curious post by Daniel Hamermesh about game theory in the Bible. Maybe someone who is more knowledgeable about religion can help me out with this.

The Ikea cafeteria (part 2)

I eat at fast food restaurants a lot. Usually, when I'm finished, I'll throw the remnants of my meal in the garbage and stack my tray neatly on top of the garbage can to be collected.

Why do I do this? It would be easier to me to leave my tray on the table for an employee to clean up — it is someone's job, after all. I think I do it for two reasons. First, it's a social norm. Other people do it, so I feel like I should do it. Second, I feel bad for the fast-food employees because they do a tough job for a tiny wage, and I feel a little better about myself if I help them out (although by this logic, I'd start tipping the guy who gives me fries, so maybe my motivation is more due to social norms than outright altruism).

The economics of orgasms

In case you thought there were any topics that are off-limits for economists, Hugo Mialon from Emory University in Atlanta has produced a working paper on orgasms (hat tip to Greg Mankiw, who posted on his blog that Mialon is presenting the paper at the upcoming American Economic Association meeting).

Mialon uses game theory to develop predictions on whether or not people will fake orgasms, and then uses survey data to show his predictions are accurate. He argues that how close people are to their sexual prime (late teens for men and about 30 for women), their chances of getting caught and whether or not they love their partner (Mialon uses a very rigid definition of love) all matter.

Journalists don't do game theory

Does game theory work in the news media business?

According to Saturday's Toronto Star, the Obama administration recently offered an interview with a senior official to all major national news outlets (CNN, ABC, NBC and CBS) except Fox News. Fox News has a reputation for having a strong-right wing bent, favouring Republicans over Obama's Democrats.

Game theory would tell us that (assuming the interview was worthwhile to do) the other networks should have done the interview. But the networks banded together and stood up for Fox by declining interviews.