Ooops, I slipped up … I left some of our readers hanging …. did Ms Tomorrow Rodriguez win the $1 Million??!!
More after the break 🙂
First, I want to recap on the post; I wanted to know if you would take the Banker’s offer in this unique situation:
4 suitcases left: 3 of them contain ONE MILLION DOLLARS and 1 contains only $300!!
Ms Rodriguez – with the odds clearly stacked in her favor – has two choices:
1. Take the Banker’s Offer of $677,000
2. Say “No Deal” and select just one more suitcase (then she will be presented with another offer)
Deal or No Deal?
The arguments ‘for / against’ basically fall into three distinct camps:
1. The Strictly Mathematical
The ‘math guys’ talk about a concept called ‘Expected Value’ (used a lot in gambling … which is what Deal / No Deal really is) that Wealthy Canadian does a great job of explaining … in the context of this post … here. Wealthy explained the Expected Value of this deal as:
The banker offered $677,000, a 9.7% ‘discounted’ offer. Lower than the expected value and therefore not a good deal.
Rick expands on this to explain why he would not take the Banker’s Offer:
If they offer 10% less than the expected value then going again is risking a loss of $77K to gain $323K with a 75% chance of success. I would definitely try again!
2. The Greedy Grabbers
These guys – and gals – want the $1 Million … that’s all there is to it! And, why not? It’s ‘free money’ after all … as explained by Josh – the Croupier’s Friend:
I would say no deal. The odds are in her favor, a situation which doesn’t happen a lot in life. Much like blackjack, when you have an eleven and dealer is showing a six, double down and wager as much as possible when the odds are in your favor. Take advantage of the situation while there is a situation to be taken advantage of.
3. The Life Changers
These people may – or may not – intuitively understand the math (i.e. the Banker always gives you a slightly cr*ppy offer to ‘keep you in the game’ … after all, who would watch if most shows didn’t go down to the wire?!) but, they understand that $677k – albeit not sounding quite as good as saying that you won $1 Million – is a sh*tload of money!
I think that this group’s mindset is best summarized by RRPF who said:
Seems pretty sensible to me … it’s all about the ‘utility’ of the money, as explained by Rick Francis (in justifying why he would take two more shots, but no more):
The utility of the additional money is NOT linear for me. Getting $450K would make huge changes in my life. However, I don’t think that the $1M would result in even twice as much of a difference. Because of that I would not be willing to risk the $450K and would take the sure thing.
So, what would I do?
Well, I would like to say that the utility of the money for me is such that I could keep pulling the trigger for the ‘fun’ and bragging rights of aiming for the full $1 Million, but I have to say that I agree with the one lone voice who voted …
… NOT SURE.
You see, we are not faced with million dollar decisions every day (OK, I’ve had a few in the past few years … even so …) so, psychologists will tell you that we have no idea how we will respond under that kind of pressure – c’mon, you’ve seen the war movies where the ‘hero type’ freezes under fire and the ‘wimp’ runs up to the bunker in the face of horrendous machine guy fire to throw a bag of grenades into the fox hole (it’s a shame that he usually gets killed in the process … hopefully he remembered to pull the pin, first?!).
So, it’s easy enough to guess what we are going to do, but any resemblance to what we actually will do is probably purely coincidental. That’s why we need systems … something that I covered in a previous post.
Oh, and yes, Tomorrow – who obviously didn’t ‘need’ the $677k – did go on to win the $1 Million … this IS America, after all 🙂