Deal or no deal ... for caffiend, goofyballer, anyone else

[i suck at poker]

What do you think constitues rational behavior on the show "deal or no deal" if you have seen it? The episode I saw today some lady was offered $197,000 when there were 4 cases left ($750k, $300k, $5, $1 I think). Even though continuing at this point from a strictly $ standpoint was +EV, Even though I have a considerable net worth, I don't think I could have turned this offer down. First, I am young. $197k invested can go a long way. There is also the issue of diminishing returns as far as impact on your life. I don't think this is a BIG factor with these amounts, but it is a factor. Also, I think the whole risk/bankruptcy thing that was mentioned in the "perfect lottery" discussion comes into play. I think it is hard to say what is rational with any hint of objectivity. I don't know where they come up with their "offers," nor do I care enough to find out, but I am interested in the psychological and "what is reasonable" sides of the show.

[goofyballer]

I actually just watched this last night, and there was an interesting situation:

Cases left are $750k, $500k, and two rags. Offer is $279k. Do you take it?

From an EV standpoint:
2/4: You knock out a rag, offer goes up to $359k (this was the next offer)
1/4: You knock out $750k - on a guess, offer goes down to ~$180k
1/4: You knock out $500k - on a guess, offer goes down to ~$200k

So half the time your offer increases by $80k, half the time your offer decreases between $80 and $100k. Sounds like I take the deal.

He didn't, and then took the next deal, which was $359k with $500k, $750k, and a rag left. Turns out the rag ($25) was the case he chose, so he happened to extract the maximum possible value he could.

But yeah, you're pretty much always being offered -EV compared to choosing the case, but, as Sklansky discusses in Tournament Poker FAP, it can be +EV to turn down a profitable bet if losing means you can't take take that bet again. If there's two remaining cases, $1 mil and a rag, and I'm being offered $400k, I take that in a heartbeat. It's hard to say what my limit would be - I might go down as far as $250k, just because that's a huge sum of money to a college kid with no job (other than poker) and that would give me a ton of freedom for the next few years of my life...like the freedom to move to Vegas and play $2/$5 NL for a year

[momowheeler]

Here's a great way to waste 10 minutes at work

[caffiend]

I don't much like the show, and have only seen one whole episode and some bits and pieces of others.

Rational behavior can be defined as selecting the course of action most likely to complete your goal. In the couple of shows I saw, the players tended to be very irrational by that standard.

In the more memorable case the family hoped to use the money towards a new home. With four cases left they had one tiny amount and three huge ones with quite a nice offer in terms of down payments on houses. They opened one more and eliminated a large number before settling on a much reduced offer. Rationally, they should have taken the offer sooner since their goal was to buy a home and the odds favored reducing the amount they had to do that with.

The other cases were similar to what everyone else has pointed out, continuing to open cases when the most likely outcome is a reduction of your offer. Faced with multiple high amounts and few remaining rags the rational choice is probably to take the offer. With say three huge amounts and one tiny one you'll be looking at a sizeable increase 25% of the time when you knock off the rag, and a decrease 75% of the time when you kick off big money. Since you can only play once, the rational choice is to take home your winnings.

Don't do what I did though. I pointed out to someone else watching that because you're wagering the offer and must pay hefty taxes on your winnings that you should, in fact, have a substantial positive expectation to continue. For example, if you can look forward to 35% going to Uncle Sam, that's a pretty hefty rake to overcome.

[i suck at poker]

Yeah, I've only seen the show once but it got me thinking a little. Also, that game screwed up on me. I had an amount in my cases that wasn't one of the amounts left? I had $1,000,000 and $5,000 left but there was $100 in my case. Could you imagine if that happened on the real show? haha. I think I was clicking the cases too fast or something. At one point it said "-1 cases to choose"

[nurelic]

Also, that game screwed up on me. I had an amount in my cases that wasn't one of the amounts left? I had $1,000,000 and $5,000 left but there was $100 in my case."

I don't watch the show but in the case of the online game, you amount is in the "FIRST" case you choose; not the remaining ones. That's why your amount was different than what was left.

NuRelic

[i suck at poker]

[quote="NuRelic"]
I don't watch the show but in the case of the online game, you amount is in the "FIRST" case you choose; not the remaining ones. That's why your amount was different than what was left.
NuRelic[/quote]

Uh, yeah ... what you just said makes no sense. One case left, two numbers left. One of them is supposed to be in my case.