Joker: Choice in a simple game with large stakes

Egil Matsen and Bjarne Strøm

Natural Field Experiments from The Field Experiments Website

Abstract: This paper examines data from the Norwegian television game show Joker, where contestants make well-specified choices under risk. The game involves very large stakes, randomly drawn contestants, and ample opportunities for learning. Expected utility (EU) theory gives a simple prediction of choice under weak conditions, as one choice is always first-order stochastically dominating. We document frequent, systematic and costly violations of dominance. Most alternative theories fail to add explanatory power beyond the EU benchmark, but many contestants appear to have a systematic expectation bias that can be related to Tversky and Kahneman's (1973) "availability heuristic". In addition, there seems to be a stochastic element in choice that is well captured by the so-called Fechner model.

Date: 2006
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Working Paper: Joker: Choice in a simple game with large stakes (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:feb:natura:00236

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