Wednesday, October 22, 2008

Deal or No Deal? Are People Really That Stupid?

Tonight I caught the end of a Deal or No Deal segment. The contestant had a $1 suitcase and two $1 million suitcases left. (This was one of those shows where they had multiple $1 million this game there were 7 of them.)

The offer was something like $625,000. I would have taken the offer. Why? Because there was a 2/3 chance one of the $1 million suitcases would get knocked out on my next selection. If that happened, the banker's offer would drop substantially and I'd be pretty much stuck with taking it because my safety net was gone.

The contestant picked a $1 million case which left the $1 and $1,000,000 cases. At this point he still manages to get something like a $415,000 offer, which I'm thinking is much higher than it needed to be. Still it is a no brainer...any rational, sane person would take the $415,000 rather than risk going home with only $1. If $415,000 is wisely invested it would be a million dollars in only a few years anyway, thanks to compound interest.

The contestant, at the urging of his friends of family (with the exception of his wise mother who counseled otherwise), turned down the deal. After that decision, the contestant lost my support and I began cheering against him. Nobody that clueless about odds and the value of money should be entrusted with $1 million. Indeed after deciding to keep his original case, the contestant walked away from the show only $1 richer.

Now I know why so many people play the lottery.

1 comment:

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