Working Paper Series, Swedish Institute for Social Research, Stockholm University
Gabriella Sjögren Lindquist
Testing the rationality assumption using a design difference in the TV game show 'Jeopardy'
() and Jenny Säve-Söderbergh
Abstract: This paper empirically investigates the rationality
assumption commonly applied in economic modeling by exploiting a design
difference in the game-show Jeopardy between the US and Sweden. In
particular we address the assumption of individuals’ capabilities to
process complex mathematical problems to find optimal strategies. The vital
difference is that US contestants are given explicit information before
they act, while Swedish contestants individually need to calculate the same
information. Given a rationality assumption of individuals computing
optimally, there should be no difference in the strategies used. However,
in contrast to the rational and focal bidding behaviors found in the US,
the Swedish players display no optimal behavior. Hence, when facing too
complex decisions, individuals abandon optimal strategies.
Keywords: Rationality; Bounded Rationality; Field Experiments; (follow links to similar papers)
JEL-Codes: C72; C93; D81; (follow links to similar papers)
28 pages, December 28, 2006
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- This paper is forthcoming as:
Sjögren Lindquist, Gabriella and Jenny Säve-Söderbergh, 'Testing the rationality assumption using a design difference in the TV game show 'Jeopardy'', Applied Economics.
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