Going for 250,000 in Who wants to be a Millionare?

[TStoneMBD]

It always kills me to see people walk away when it is a poor decision according to ev. Of course, in some situations walking away with $125,000 is more important than winning $250,000 50% of the time to the particular contestant.

In this case, I'm watching the show and the guy playing has used up all his lifelines, and has used his 50/50 on this question. He is playing for $250,000 and a chance for $500,000 to a million and if he loses he walks away with $32,000. He has the option to walk away with $125,000 if he chooses not to answer the question.

Question: In 1999 a a Dallas Zoo researcher found that ocelots are drawn to the scent of which of the following?

Answers: Calvin Klein Obsession or Glade Air Freshner (50/50 was used.)


Contestants thought process in white: <font color="white"> The contestant determined that it seems more likely that CKO would be the correct answer as GAF comes in a variety of scents, and the answer is not specific to the particular scent. </font>

Still, the contestant decides to walk away.

Answer in white: <font color="white"> CKO is the correct answer. </font>

Would you consider this guy to be crazy and if you were in his shoes would you have a hard time pressing on for the quarter mill? The whole time I was yelling at the tv telling the guy to coin flip it and I don't think there would be any doubt in my mind that going for the 250,000 is the much better idea even if you consider that the odds that the real contestant can answer the 500k question a whole lot better than I can considering I am terrible at trivia. The only prominant determining factor that may have me lean towards walking away with 125k would be if the taxes on the 250k are higher than the 125k and therefore I would actually be sacrificing ev in my gamble. Is this actually the case?

[andyfox]

So he loses $93,000 is he's wrong, but wins $125,000 is he's right? And he felt more than 50-50 he could come up with the right answer? So, mathematically, he should have taken a chance.

But maybe it wasn't a mathematical decision. Maybe the $125,000 got him out from under and would make a real difference in his life. Maybe the psychological trauma of knowing the $125,000 was in his pocket but he gambled it away would have been devastating to him.

[[censored]]

Interesting question, and you're probably right but I would have walked as well I think.

[TStoneMBD]

yes of course, but the question is whether his decision is based on a pychological blunder or rational reasoning superior to common logic. what do you think, or is there not enough information to come to a conclusion or at least an educated guess? maybe this post would be better off in the psych forum.

[Sponger15SB]

[ QUOTE ]
Of course, in some situations walking away with $125,000 is more important than winning $250,000 50% of the time to the particular contestant.

[/ QUOTE ]

Exactly. So who gives a [censored] about EV.

You'd really just guess on the $1,000,000 question if you only had two answers left because its +EV?

[TimTimSalabim]

EV is not the only factor, as you hinted at in your opening paragraph. You've got to consider risk aversion as well. Were it not for that, no one would every voluntarily buy insurance.

[handsome]

Some people got gamb00l in them and some people don't. Even if you set up a situation where they can take $100 or a 1/10 chance of winning $10,000, most people will take the $100. *shrug*

[Sponger15SB]

Not to mention you could do a hell of a lot better investing $500,000 as opposed to $64,000

[Sponger15SB]

[ QUOTE ]
Even if you set up a situation where they can take $100 or a 1/10 chance of winning $10,000, most people will take the $100. *shrug*

[/ QUOTE ]

I'll bet you $100 and give you 1-10 odds that you're completely wrong.

[ClaytonN]

[ QUOTE ]
But maybe it wasn't a mathematical decision. Maybe the $125,000 got him out from under and would make a real difference in his life. Maybe the psychological trauma of knowing the $125,000 was in his pocket but he gambled it away would have been devastating to him.

[/ QUOTE ]

This is the primary reason why "EV" isn't a big factor in these kinds of games. A lot of these contestants have never even seen $125,000 in their lives. When they get to that point, they are more concerned with NOT going down to 32k than potentially going to 250k.

[Benholio]

Well, $250,000 isn't worth twice as much as $125,000 to most people. Its more a case of expected utility than expected value, but I think thats what you were getting at.

[TripleH68]

You touch on a great point when you mention the possibility of hitting the next question...which would mean really big bucks.

My sister was on the show though, so I can offer a little understanding. She had $64,000 and was deciding on whether to go for $125,000. She decided to take the $$$.

Why? $25,000 in credit card debt and college loans + the chance to have a downpayment on a home.

Back to $32,000 = decade of regret.

[TStoneMBD]

no because at this point the proportions of ev is reduced. however, this clearly means that i dont think that there comes a point where choosing less variance is greater than choosing ev. so it is my opinion that coin flipping 125k rather than accepting 93k is the correct decision. by coin flipping and winning, based on a very practical educated guess, you also get the chance to view the 500k question.

however, you are right in that i dont think i would coinflip 250k for a shot at 500k, but i would certainly have to consider it mainly because i would get to look at the million dollar question. i wouldnt coinflip 500k just for 32k equity, thats ridiculous. before going on the show i would have to estimate what my odds are at getting the correct answer on these questions though as they directly influence my decisions when these choices arise.

[ClaytonN]

[ QUOTE ]
Even if you set up a situation where they can take $100 or a 1/10 chance of winning $10,000, most people will take the $100. *shrug*

[/ QUOTE ]

Replace $100 with $1000 and then you're correct. I will always take the $1,000 assuming I only get one chance at guessing, as both choices have the same EV.

[GuyOnTilt]

Was the contestant's name Daniel Bernoulli?

GoT

[Yeti]

Pretty dumb thread. You knew the answers already.

[handsome]

[ QUOTE ]
[ QUOTE ]
Even if you set up a situation where they can take $100 or a 1/10 chance of winning $10,000, most people will take the $100. *shrug*

[/ QUOTE ]

I'll bet you $100 and give you 1-10 odds that you're completely wrong.

[/ QUOTE ]

I accept your wager. Care to run the experiment?

[TStoneMBD]

dumb thread? i didnt know the answers while watching the show and i wanted the guy to coinflip it as that is what i would have done at the time. my opinion on the matter has absolutely nothing to do with the fact that i now know the answer to the question.

[[censored]]

the thread is fine.

[Yeti]

I didn't mean the answer to the trivia question, duh.

I meant you already knew why most people wouldn't choose to take this '+EV' gamble.

[Yeti]

PS. Imagine you're in the seat. Multiply the $ amounts by 10, 50, whatever, and imagine Bill Gates shouting 'COIN FLIP IT YOU IDIOT'.

[sexypanda]

There's no "long run" in Who Wants to be a Millionaire 250K coinflip questions. So though ev plays a factor, its not nearly as much of a factor as the immediate utility of the money.

[Benholio]

[ QUOTE ]
[ QUOTE ]
Even if you set up a situation where they can take $100 or a 1/10 chance of winning $10,000, most people will take the $100. *shrug*

[/ QUOTE ]

Replace $100 with $1000 and then you're correct. I will always take the $1,000 assuming I only get one chance at guessing, as both choices have the same EV.

[/ QUOTE ]

Yes, but there exists a value of X where you would take $X rather than a 1/10 chance for $100X (correctly).

[TimTimSalabim]

Yes, and since that value of X varies for each person depending on their risk aversion and financial means, this thread is kind of pointless. Or maybe it's brilliant, I can't tell anymore. At least there aren't any references to poopers /images/graemlins/grin.gif.

[Benholio]

[ QUOTE ]
Yes, and since that value of X varies for each person depending on their risk aversion and financial means, this thread is kind of pointless. Or maybe it's brilliant, I can't tell anymore. At least there aren't any references to poopers /images/graemlins/grin.gif.

[/ QUOTE ]

Until now.

[Reef]

[ QUOTE ]
Some people got gamb00l in them and some people don't. Even if you set up a situation where they can take $900 or a 1/10 chance of winning $10,000, most people will take the $900. *shrug*

[/ QUOTE ]

fixed

[TimTimSalabim]

[ QUOTE ]
[ QUOTE ]
Yes, and since that value of X varies for each person depending on their risk aversion and financial means, this thread is kind of pointless. Or maybe it's brilliant, I can't tell anymore. At least there aren't any references to poopers /images/graemlins/grin.gif.

[/ QUOTE ]

Until now.

[/ QUOTE ]

Damn, I went and proved Godel right again!

[SCfuji]

if i were a billionaire id go for it everytime. if i were me id fold and take the quarter MM.

[GuyOnTilt]

[ QUOTE ]
Was the contestant's name Daniel Bernoulli?

GoT

[/ QUOTE ]

Okay, since nobody's biting...

St. Petersburg Paradox (http://en.wikipedia.org/wiki/St._Petersburg_paradox)

Result: Bernoulli's Hypothesis (http://www.math.fau.edu/Richman/Ideas/daniel.htm)

GoT

[jcx]

[ QUOTE ]
There's no "long run" in Who Wants to be a Millionaire 250K coinflip questions.

[/ QUOTE ]

That's correct and the point I would make. If he was on Millionaire once a week then EV would need to be considered. This is a once in a lifetime proposition. Unless losing $93K means nothing to you, EV here is almost irrelevant. I would have to be 100% certain of my answer in this instance.

[andyfox]

I watch the show only on occasion, but I have heard some people say that "I told myself if I got to [X] dollars and I wasn't sure I was going to stop." Some people, too, don't have much gamble in them even if the money is not the paramount concern.

[jokerthief]

What's worse is that he figured the problem out logically. The glade air freshener couldn't be it because it comes in many scents as opposed to the Calvin Klein cologne which is one scent.

[ononimo]

[ QUOTE ]
What's worse is that he figured the problem out logically. The glade air freshener couldn't be it because it comes in many scents as opposed to the Calvin Klein cologne which is one scent.

[/ QUOTE ]

As elegant as that logic is, I wouldn't have been surprised if it hadn't held up. I don't watch the show but it wouldn't have surprised me if Fresh Pine (or whatever specific scent) of Glade Air Freshener was the correct answer and they just simplified the choices for the purpose of the question.

Remember, Calvin Klein Obsession comes in more than one scent too (if you include Obsession for Men) ... or are we assuming that they specifically meant the women's perfume? I'm not sure I'd want to risk $93,000 on whether or not someone else is being absolutely literal in how they phrase a question.

[MarkL444]

EV isnt all that matters.

[Yobz]

My GF works for the Houston Zoo and she told me about this, so I would have gone for the 250k without taking any lifelines and would have gotten it right.. /images/graemlins/smile.gif

[Alobar]

[ QUOTE ]
[ QUOTE ]
Was the contestant's name Daniel Bernoulli?

GoT

[/ QUOTE ]

Okay, since nobody's biting...

St. Petersburg Paradox (http://en.wikipedia.org/wiki/St._Petersburg_paradox)

Result: Bernoulli's Hypothesis (http://www.math.fau.edu/Richman/Ideas/daniel.htm)

GoT

[/ QUOTE ]

awesome, id never heard of that before. This thread was worth the read /images/graemlins/smile.gif

[KingDan]

[/ QUOTE ]

Okay, since nobody's biting...

St. Petersburg Paradox (http://en.wikipedia.org/wiki/St._Petersburg_paradox)

GoT

[/ QUOTE ]

That is awesome.

[GuyOnTilt]

Here's a better and more in-depth article on the St. Petersburg Paradox and its conclusions:

Stanford Encyclopedia of Philosophy (http://plato.stanford.edu/entries/paradox-stpetersburg/)

GoT

[MarkD]

Bernouli was wicked smart.

[Punker]

Kelly criteria.

[jacki]

[ QUOTE ]
This thread was worth the read /images/graemlins/smile.gif

[/ QUOTE ]

I'm smarter because of this thread.


But I don't get this part from this article (http://plato.stanford.edu/entries/paradox-stpetersburg/):
Real casinos right now play games that offer the extremely remote possibility of continuing too long for anyone to complete, or of prizes too large to be managed.

What games?

[mmcd]

however, this clearly means that i dont think that there comes a point where choosing less variance is greater than choosing ev. so it is my opinion that coin flipping 125k rather than accepting 93k is the correct decision

It's all a question of marginal utility.

If someone offered you a choice between giving you $50 million on the spot or letting you flip a coin for $125 million, you'd take the coinflip?

[RicktheRuler]

[ QUOTE ]
[ QUOTE ]
Even if you set up a situation where they can take $100 or a 1/10 chance of winning $10,000, most people will take the $100. *shrug*

[/ QUOTE ]

I'll bet you $100 and give you 1-10 odds that you're completely wrong.

[/ QUOTE ]

Sponger is 100% correct. I'll give you those same odds if we can set it up.

[vulturesrow]

[ QUOTE ]
Bernouli was wicked smart.

[/ QUOTE ]

I have a cool job thanks to Bernoulli. /images/graemlins/smile.gif

[TimTimSalabim]

[ QUOTE ]
Bernouli was wicked smart.

[/ QUOTE ]

He always gives me a lift.

[woodguy]

This is more an economic question, rather that of just a pure +/-EV question.

You must assign a value to the the zero variance cash of walking.

Intuition says ZVWA$1&gt;$1 earn after taxes from regular job (ZVWA=Zero Variance Walk Away) in the minds of most contestants so that needs to be factored into the decision.

Regards,
Woodguy

[Jeff W]

I flip it. EV is too high to pass up. I also guessed Calvin Klein based on the idea that the researcher had noticed ocelots attracted to humans wearing the perfume--of course, I could be totally wrong in my reasoning and at worst still be 50/50.

[ethan]

[ QUOTE ]
[ QUOTE ]
Bernouli was wicked smart.

[/ QUOTE ]

He always gives me a lift.

[/ QUOTE ] http://www.80sreborn.com/images/revenge-nerds-2-4.jpg

NERD! NERD! NERD! NERD!