The Price is Right: Analyzing Bidding Behavior on Contestants’ Row

Paul Kvam

The American Statistician, 2021, vol. 75, issue 1, 15-22

Abstract: The TV game show “The Price is Right” features a bidding auction called Contestant’s Row that rewards the player (out of four) who bids closest to an item’s value without overbidding. By exploring 903 game outcomes from the 2000–2001 season, we show how player strategies are significantly inefficient, and compare the empirical results to probability outcomes for optimal bid strategies found in a recent study. Findings show that the last bidder would do better using the naïve strategy of bidding a dollar more than the highest of the three bids. We apply the EM algorithm in a novel way to extract a maximum amount of information from observed player bids. The gained knowledge about a player’s evaluation of merchandise allows us to uncover new insights into player behavior, including the potential effects of anchoring.

Date: 2021
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DOI: 10.1080/00031305.2019.1592782

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