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Decyzje

Show issue
Year 12/2020 
Volume 2020 
Issue 34

Culture, learning and rational decision-making: evidence from a TV show

Júlio Lobão
University of Porto

12/2020 2020 (34) Decyzje

DOI 10.7206/DEC.1733-0092.144

Abstract

This paper analyzes the French and the Vietnamese versions of the TV game show “The Price is Right”, using data from 130 episodes. We focus on the bidding game, covering 434 rounds and 1,736 bids. We document that players deviate signifi cantly from what is predicted by the model of rational expectations, especially in the French population. Moreover, Vietnamese fourth bidders are found to win more frequently than their French counterparts in spite of using strategic bids less often. We attribute these results to cultural reasons. Contestants from the collectivistic, uncertainty-tolerant culture (i.e., Vietnam) are more reluctant to engage in strategic bidding than individuals from the individualistic, uncertainty-avoidant culture (i.e., France). However, Vietnamese contestants pay more attention to the estimates of the previous players and thus make a better use of the informational advantage inherent to the sequential nature of the game. Overall, our evidence suggests that culture is an important omitted variable in studies that examine cross-country differences in decision-making.

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APA style

Culture, learning and rational decision-making: evidence from a TV show. (2020). Culture, learning and rational decision-making: evidence from a TV show. Decyzje, 2020(34), 5-27. https://doi.org/10.7206/DEC.1733-0092.144 (Original work published 12/2020AD)

MLA style

“Culture, Learning And Rational Decision-Making: Evidence From A Tv Show”. 12/2020AD. Decyzje, vol. 2020, no. 34, 2020, pp. 5-27.

Chicago style

“Culture, Learning And Rational Decision-Making: Evidence From A Tv Show”. Decyzje, Decyzje, 2020, no. 34 (2020): 5-27. doi:10.7206/DEC.1733-0092.144.