High-stakes failures of backward induction

• 成果类型: Article
• 署名作者: Teeselink, Bouke Klein; Van Dolder, Dennie; Van Den Assem, Martijn J.; Dana, Jason D.
• 署名单位: University of London; King's College London; University of Essex; Vrije Universiteit Amsterdam; Tinbergen Institute; Yale University
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2024.07.001
• 发表日期: 2026
• 关键词: Laboratory experiments; coordination games; natural experiment; Limited foresight; OMISSION BIAS; INFORMATION; BEHAVIOR; equilibrium; price; rationality

摘要

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 the Showcase Showdown, a sequential game of perfect information for which the optimal strategy can be found through backward induction. We find that contestants systematically deviate from the subgame perfect Nash equilibrium. These departures from optimality are well explained by a modified agent quantal response model that allows for limited foresight. The results suggest that many contestants simplify the decision problem by adopting a myopic representation, and optimize their chances of beating the next contestant only. In line with learning, contestants' choices improve over the course of our sample period.