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  • Thumbnail for Deal or No Deal? : How simple is this decision really?
    Deal or No Deal? : How simple is this decision really? by Dean, Georgia Simpson

    Modeling decision making behavior has challenged economist and psychologist alike. This study uses data from the game show Deal or No Deal from the Netherlands, Germany, United States to study the factors that influence decision making. Each decision on the show is the choice between a definite amount offered by a “banker” or the choice to continue playing in hopes of winning more money, much like a stock option holder’s decision to exercise their option. Using a model similar to one that was used to determine the psychological factors that affected stock option exercise activity, this study seeks to find what drives the decisions on the show. The findings are that the bank offers are not significant, however, the percent of the expected value of the bank offer is. This suggests that players are viewing their choice in a complex manner, expanding the influences outside of the offer and what is expected if they keep playing. The results of how contestants play in comparison to one another varied across countries in significance, indicating that cultural difference may play a role in decision making behavior.