Deal or No Deal

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EV is one consideration, but hardly the most important. If someone offered to give me $2 million or flip a coin for either $5 or $5 million, I wouldn't have to think about it.

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Exactly. This game is easy to play by the numbers. But it's also good comparison to playing above your bankroll in poker limits. If I was on the game the first offer I had over 10grand or so I'd take it just because I'm flat ass broke, no matter what the EV. And unless these people are millionares there's NO reason they should be rejecting these 100k+ offers even if it's -EV.

There's a cardplayer article that talks about this, but it's from the opposite side... that people gamble with their losses, but don't with sure gains. they fail to mention how much this 3,000 would affect the people surveyed.
CP Link
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Understanding Poker Errors Through Prospect Theory — Part II
With Co-author Rachel Croson
by Barry Tanenbaum

...
Asymmetric risk preferences: When it comes to gains, people are risk-averse. That is, when they are given the chance to win $100 for sure or flip a coin for $200, they tend to choose the sure win. However, when it comes to losses, individuals are risk-loving. That is, they prefer a fifty-fifty chance of losing $200 to a sure loss of $100. In a more striking example, researchers asked 95 subjects which they would prefer:

A. Winning $3,000 for sure

B. Winning $4,000 with an 80 percent chance
Of course, the expected value (EV) of B is higher than the expected value of A ($3,200 is larger than $3,000), yet 80 percent of the subjects chose option A. Could it be that these subjects just did not like to gamble? Not really, because later in the experiment, these same subjects were offered the following choice:

C. Losing $3,000 for sure

D. Losing $4,000 with an 80 percent chance

Here, the expected value of C is higher than the expected value of D (-$3,000 is larger than -$3,200), yet 92 percent of the subjects chose option D. Now these same subjects are risk-loving, willing to sacrifice the $200 of expected value in order to take the gamble. In other words, people would rather take a sure profit than a good gamble, but would rather take a bad gamble than a sure loss.

To seasoned gamblers, this is a very surprising result, in that the vast majority chose the proposition with the worse EV each time. However, at the poker table we see this behavior all the time, as the following examples show.

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edit: I don't know if this is a good example, but say you have worked hard for a long time to build your bankroll to the limit you want to play at. and one day you go on and somehow you accidently join the highest NL game where your whole bankroll is on the line. 1st hand--you're in the BB with AA, UTG goes all in and it's folded around to you, do you call with your entire bankroll even though it's major +EV? hell no, you get the [censored] out.

[Sponger15SB]

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If I was on the game the first offer I had over 10grand or so I'd take it just because I'm flat ass broke, no matter what the EV. And unless these people are millionares there's NO reason they should be rejecting these 100k+ offers even if it's -EV.

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wow.

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wow.

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does that suprise you? do you really think these people should be gambling away these offers no matter how much the money would affect they're lifestyle?

[VarlosZ]

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If I was on the game the first offer I had over 10grand or so I'd take it just because I'm flat ass broke, no matter what the EV. And unless these people are millionares there's NO reason they should be rejecting these 100k+ offers even if it's -EV.

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Play the online game at nbc.com a few times, and you'll see how crazy this approach is. Your EV at the very start is over $130,000 (I worked it out, but forget the exact number). With the low offers they give you, there's no way you should accept anything until there are, say, 8 suitcases left. It's extremely unlikely that you'll wind up with less than $10K if you stop gambling around that time, and even then you'll usually be in a position to keep going for a little bit while getting odds you can't pass up and a variance you can stomach.

[lastchance]

Online gives you an idea the algorithm the bank uses to figure out their deal, and after a while, the correct strategy seems to be to whittle down to eight, and you get about 50% of EV around there. At 5, it's about 60%. At 4, it becomes about 70% of EV(going all the way), and at 3, it's about 90% of EV(going all the way).

The 4 to 3 jump is immense.

This game would be really nice to play compared to other game shows, where your EV looks to be about $20,000, max. With this, you're looking at an average EV of $100,000.

[1800GAMBLER]

the main factor for the algorithm is the variance between your decisions. the higher the variance the lower the ev. finish with $1m and $1 as your last boxes and they'll give you some real [censored] deals. awesome algorithm.

edit: for the online game.

[lastchance]

For the online game, they almost always give you 90+% of prize pool when it gets down to 3 and will be very quick to shaft you in a situation like the above.

Personally, if I was ever to play this game, I take a deal at 3 90% of the time, knowing that getting shafted the next round would suck.

[1800GAMBLER]

i just had a ton of times in which i was not offered 90% (more like 70%) of the EV because my variance was huge.

as i said above, the variance seems to be the main factor.

[lastchance]

I'm talking when it comes down to 3. I've gotten a deal for 90% of the prize pool almost every time I've played it.

[tpir90036]

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If I was on the game the first offer I had over 10grand or so I'd take it just because I'm flat ass broke, no matter what the EV. And unless these people are millionares there's NO reason they should be rejecting these 100k+ offers even if it's -EV.

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the problem is that if you are doing well there is a good chance your next deal is going to be lower than the one you currently have. so taking the deal earlier might be a good play if you are going to get nervous and take a worse one later on. your EV for the current deal is kind of moot if you aren't going to go all the way and just settle for a lower (and still -EV) play at the end.