DEAL or NO DEAL (TV Game Show) How Decide?
 

DEAL or NO DEAL. USA TV Game Show. Airs Friday nights, 8pm EST on NBC.

What is the correct way to decide whether to accept the bankers offer?

The way I'm figuring it, you add the remaining dollar amounts and divide the total dollars by the number of cases left. That would be your EV.

If the bankers offer is substantially lower, pick more cases. If the bankers offer is close to your EV, either accept it or pick more cases. It doesn't matter. But accepting is lower variance and less risky.

If the bankers offer is higher than EV, accept it. This rarely happens.

Is this correct?

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

Yep, that's pretty much it. Usually the offer will be less than 60% of your EV. Once the player gets down to 6-7 cases remaining, the offers become reasonable, and it's time to accept. Whether you win a large amount of money or not depends purely upon luck.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

Bankers offer is always -EV.

The time to deal is only really when the amount becomes significant to you.

How does that paradigm (3 doors, pick 1, shown one of the ones thats a booby prize, switch, etc) work here?

If you are left with $20,000 and $50,000 there was a 1/20 chance you picked the $20,000 and so 19/20 chance that its in the other box.....likwise with numbers reversed. Do you switch?

Or does this not apply here because it wasn't a win/lose situation?

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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Bankers offer is always -EV.

The time to deal is only really when the amount becomes significant to you.

How does that paradigm (3 doors, pick 1, shown one of the ones thats a booby prize, switch, etc) work here?

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It doesn't--the short reason is the doors/cases aren't chosen in the same way (or more exactly, with the same information)


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If you are left with $20,000 and $50,000 there was a 1/20 chance you picked the $20,000 and so 19/20 chance that its in the other box.....likwise with numbers reversed. Do you switch?

Or does this not apply here because it wasn't a win/lose situation?

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It doesn't apply because the chance that either case holds the $20,000 or the other one is 50/50. (assuming just two cases left). This has been discussed before--use search if you want to find the reasoning.

Shane

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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Bankers offer is always -EV.


[/ QUOTE ] Untrue

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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Bankers offer is always -EV.

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seen several UK episodes where this is not true

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

Banker's offer in the US can also be +EV. I saw a show last week with $750k and $10 remaining, the offer was $400k.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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Banker's offer in the US can also be +EV. I saw a show last week with $750k and $10 remaining, the offer was $400k.

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this is stupid i know but there is a slot machine in the U.K i was in the pub last night playing deal or no deal slot.
i got on the board and got down to the final two boxes
£10 and mega streak (mega streak pays about £80)
the banker offered me £25, i think that offer is -ev so being the prick i was i didn't take it and the box was £10
my conclusion bankers offer is -ev

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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What is the correct way to decide whether to accept the bankers offer?
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Is this correct?

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It's unclear what the banker's behavior is, or whithat the actual value of the money is. Without those two pieces of information, it's not too easy to determine the correct strategy.

Generally speaking, it's going to be a poor choice to take the deal when it's lower than the geometric mean of the values, and a good choice to take the deal when it's higher than the arithmetic mean, but you don't see contestants with calulators.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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You don't see contestants with calulators.

[/ QUOTE ] I've only seen a few episodes, so my sample is very small, but the contestants I saw didn't even seem to be able to do simple arithmetic in their head.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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the contestants I saw didn't even seem to be able to do simple arithmetic in their head.

[/ QUOTE ] I've seen things as cut and dry as a $200,000 case and two nothing cases with a $70,000 deal getting turned down.

People should really think about the concepts of expected value and risk aversion for five minutes before getting on the show. But that doesn't make good TV.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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I've seen things as cut and dry as a $200,000 case and two nothing cases with a $70,000 deal getting turned down.

People should really think about the concepts of expected value and risk aversion for five minutes before getting on the show. But that doesn't make good TV.

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People are morons, even university graduates who take math-based courses don't understand elementary EV and risk adversion concepts, and seeing Deal-or-no-deal contestants play horrendously tilts me hard.

In fact, the entire game is structured in such a way, that a "deal" is usually higher than the actual amount in the box. This makes most contestants look like geniuses.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

I don't know how the deal offers are structured, and haven't seen any good sources on it. (And don't have sufficient masochism or patience to watch the show to do appropriate research.)

However, it seems like the offers could be structured in such a way that the marginal EV of removing more cases is a good move, even when the current offer is larger than the arithmetic mean of the cases, so it's not necessarily sufficient to only look at the current offer compared to the case values.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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In fact, the entire game is structured in such a way, that a "deal" is usually higher than the actual amount in the box.

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I must not understand something here.. can you explain?

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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I must not understand something here.. can you explain?

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Basically, people really only feel the pressure to deal when there are one (or maybe two) large amounts and a bunch of small amounts on the board. As a consequence, typically, people who take the deal, will receive more than what's in their case.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

okay, thank you for the clarification

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

I'm sure this has been discussed here before, but the dynamic that makes the game more interesting is not pure EV, but how the value of money changes relative to how much you have. For example, you could say that taking $150K is equal in EV to a choice that will yield either $0 or $300K half the time each, but most people would take the $150K, because the second $150K has less value to you than the first one. That said, would you take $100K or take option B when it will be either $0 or $300K? Somewhere in there is a line for you where you take the risk. It's not really just an EV thing unless you already have a lot of money. I think this is why the game is interesting.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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I must not understand something here.. can you explain?

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Basically, people really only feel the pressure to deal when there are one (or maybe two) large amounts and a bunch of small amounts on the board. As a consequence, typically, people who take the deal, will receive more than what's in their case.

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In addition to this, players make the most horribly EV decisions when the remaining boxes are skewed in favour of the lower end boxes.

Eg. Let's say the remaining boxes are $1, $2, $3 and $100000, and the offer is $20000. The EV of playing on is roughly $25000+.

Let's say the player now takes the deal, pocketing $20000. They go through the motions and play the game through.

The final box would either be $1, $2, $3 and $100000. In three out of these four cases, the contestant is "seen" to have magically turned a tiny amount of money into $20000! They would look pretty clever to an unmathematical audience.

I could present my argument in a more formal manner, but I think the above example is illustrative of my point that the game is basically designed to make people look like geniuses (due to faulty reasoning and logic).

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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In fact, the entire game is structured in such a way, that a "deal" is usually higher than the actual amount in the box.

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I must not understand something here.. can you explain?

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The average value per case is $131,477. Only 6 of the 26 cases are larger than that.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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In fact, the entire game is structured in such a way, that a "deal" is usually higher than the actual amount in the box.

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I must not understand something here.. can you explain?

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The average value per case is $131,477. Only 6 of the 26 cases are larger than that.

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Agreed, but that also indicates that very few deals should be accepted, barring a heavily weighted scenario such as bluebear's

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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I'm sure this has been discussed here before, but the dynamic that makes the game more interesting is not pure EV, but how the value of money changes relative to how much you have.

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It's called risk aversion, and comes up in bankrolling discussions.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

slightly unrelated, but from the Deal or No Deal wikipedia:
http://en.wikipedia.org/wiki/Deal_or...tific_research

"A team of economists have analyzed the decisions of people appearing in European and US episodes of Deal or No Deal and found, among other things, that contestants are less risk averse or even risk seeking when they have seen their expected winnings tumble."

lol i love how it took a "team of economists" to figure out what every poker player already knows as tilt .

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

Oddly enough, I've also seen reverse tilt on the show. Someone recently had an offer of $107k... the average case was worth about $135k, so it was a reasonable 80% of EV offer. The contestant chose to keep playing though.

In play was the 750k, 200k, and five small numbers.

She then eliminated the 200k case. The next offer was only $50,000... only 40% of the value of the average case. The loss had affected her, and she decided to take the deal.

As they played through the "what ifs", her next case was a small number, and the offer was $120k... back up to the 80% level. If she had continued, she would have had a 5/6 chance to more than double her money.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

I don't think EV really comes into play here. EV is used to make decisions based on long term expectations where you are willing to accept some variance.

Imagine the scenario where you are given 5 million dollars, and you are offered a coin flip to either win 20 million or lose the 5 million. If you were Bill Gates, 50% chance to lose 5 million isn't such a huge deal to you. But if you are a Single mother with 10 kids on welfare...50% chance to lose 5 million is a huge risk. And keeping the 5 ensures you a happy life and the ability to care for your children, while increasing it to 20 million would only be marginally better...certainly not worth a 50% probability of losing everything.

It's "Risk of Ruin" that is the overriding factor here. Here's a nice explanation using poker as the example:
http://miserlybastard.blogspot.com/2...etirement.html

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

This show eveolves around 'relative risk'...

blah blah blah.

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Bankers offer is always -EV.

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seen several UK episodes where this is not true

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Also Australian, its like the Bank doesn't want to risk losing 200k i.e 'insurance' or something.

JT

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

There are more episodes filmed than are aired. Contestants agree prior to the show that if their episode is not aired they don't get paid. Getting a good offer early on and accepting isn't going to get you any TV time.

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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There are more episodes filmed than are aired. Contestants agree prior to the show that if their episode is not aired they don't get paid. Getting a good offer early on and accepting isn't going to get you any TV time.

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false

Re: DEAL or NO DEAL (TV Game Show) How Decide?
 

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Imagine the scenario where you are given 5 million dollars, and you are offered a coin flip to either win 20 million or lose the 5 million. If you were Bill Gates, 50% chance to lose 5 million isn't such a huge deal to you. But if you are a Single mother with 10 kids on welfare...50% chance to lose 5 million is a huge risk. And keeping the 5 ensures you a happy life and the ability to care for your children, while increasing it to 20 million would only be marginally better...certainly not worth a 50% probability of losing everything.

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As an aside, I think the billionaire of choice for such analogies should always be Kerry Packer, notwithstanding his death two years ago.