Double or Nothing!? Small Groups Making Decisions Under Risk in 'Quiz Taxi'

Abstract:     
This paper investigates the behavior of contestants in the game show “Quiz Taxi” when faced with the decision whether to bet the winnings they have acquired on a final “double or nothing” question. The decision is made by groups of two or three persons. This set-up enables the decision making process to be studied by observing group communication. There is a strong correlation between communication content and the final choice, indicating that, from the contestant‘s perspective, the decisions are rational and that the context is an important factor in the final decision. This is particularly so for individual valuations of the money at stake. More extensive discussions help to make the right decision. As contestants do not apply to go on the show, they represent a less selected sample than those in previous game show studies. Overall, the contestants show risk averse behavior, suggesting CRRA-parameters larger than 1. The study also shows some heterogeneity in attitude to risk. Contestants who do better in the show are more likely to go for the risky option, because they are more knowledgeable and more confident. All-female groups are less likely and three-person groups more likely to choose the risky option.

Number of Pages in PDF File: 37

Keywords: Risk attitude, game show, communication, group decision

JEL Classification: C93, D70, D81

working papers series