Deal or No Deal? Decision Making under Risk in a Large-Payoff Game Show
Open accessAbstract
We examine the risky choices of contestants in the popular TV game show “Deal or No Deal” and related classroom experiments. Contrary to the traditional view of expected utility theory, the choices can be explained in large part by previous outcomes experienced during the game. Risk aversion decreases after earlier expectations have been shattered by unfavorable outcomes or surpassed by favorable outcomes. Our results point to reference-dependent choice theories such as prospect theory, and suggest that path-dependence is relevant, even when the choice problems are simple and well defined, and when large real monetary amounts are at stake. (JEL D81)
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Loss aversion has been well documented in the laboratory and in many field settings, including high-stakes game show decisions, financial markets, politics, trade policy for declining industries, rate of organ donation for transplant cases, and monkey behavior.
“Loss aversion has been well documented in the laboratory and in many field settings (2), including high-stakes game show decisions (3), financial markets (4), politics (5), trade policy for declining industries (6), rate of organ donation for transplant cases (7) and has also been evident in monkey behavior (8).”
From Amygdala damage eliminates monetary loss aversion (2010) · cites this paper as [3]
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References 42 · Cited by 110
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- Authors
- Post, T., van den Assem, M. J., Baltussen, G., & Thaler, R. H.
- Affiliations
- Nazarbayev University (KZ)
- Erasmus School of Economics, Erasmus University of Rotterdam.
- Tinbergen Institute (NL)
- National Bureau of Economic Research (US)
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2008-03-01
- Volume
- 98
- Issue
- 1
- Pages
- 38-71
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W2142358731
- Cited by
- 110
- References
- 42
- Citations by year
- 2026: 1 · 2025: 4 · 2024: 35 · 2023: 3 · 2022: 4 · 2021: 5 · 2020: 2 · 2019: 1 · 2018: 5 · 2017: 1 · 2016: 5 · 2015: 6 · 2014: 8 · 2013: 6 · 2012: 9
- FWCI
- 2.84
- Type
- journal article
- Language
- en
- Open access
- green
- papers.tinbergen.nl
- Locations
- American Economic Review (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- SSRN Electronic Journal (submittedVersion)
- RePub (Erasmus University Rotterdam) (submittedVersion, other-oa)
- Econstor (Econstor) (submittedVersion)
- Topics
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Social Sciences › Safety Research › Experimental Behavioral Economics Studies
- Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
- Keywords
- Deal or No Deal, risk aversion, decision making under risk, prospect theory, reference dependence, path dependence, expected utility theory
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