CDR Seminar Series: High-Stakes Failures of Backward Induction: Evidence from “The Price Is Right”

Dr Dennie van Dolder, Senior Lecturer in Economics at the University of Essex examines high-stakes strategic choice using more than 40 years of data from American TV game show 'The Price Is Right'.

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We examine high-stakes strategic choice using more than 40 years of data from the American TV game show The Price Is Right. In every episode, contestants play a simple sequential game of perfect information for which the optimal strategy can be found through backward induction. We find that contestants systematically deviate from the unique subgame perfect Nash equilibrium and the equilibrium of an agent quantal response model. Omission bias cannot explain the deviations from optimality. Instead, the observed behaviour is well captured by a model of limited foresight, where a sizable fraction of the contestants myopically considers the next stage of the game only. In line with learning, the quality of contestants’ choices improves over the course of our sample period.

The Speaker

Dr Dennie van Dolder is a Senior Lecturer in Economics at the University of Essex (UK). He is also the director of ESSEXLab, the state-of-the-art behavioural laboratory at the Faculty of Social Sciences at Essex. In his research, he uses a broad portfolio of research methods–including experiments and advanced microeconometric techniques–to further our understanding of human judgment and decision making. Before moving to Essex, Dennie was an Assistant Professor at the Vrije Universiteit (VU) Amsterdam and a Research Fellow at the University of Nottingham (UK). He serves as an Associate Editor for the Journal of Economic Behavior & Organization. Personal website:

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CDR Seminar Series

This event is part of a series looking at research on psychological and analytical aspects of decision making and is hosted by the Centre for Decision Research at the University of Leeds.

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This event is open to staff and students at the University of Leeds, and others interested in research on decision making.