The Price is Right: Analyzing Bidding Behavior on Contestants' Row

摘要

The TV game show "The Price is Right" features a bidding auction called Contestant's Row that rewards the player (out of four) who bids closest to an item's value without overbidding. By exploring 903 game outcomes from the 2000-2001 season, we show how player strategies are significantly inefficient, and compare the empirical results to probability outcomes for optimal bid strategies found in a recent study. Findings show that the last bidder would do better using the naive strategy of bidding a dollar more than the highest of the three bids. We apply the EM algorithm in a novel way to extract a maximum amount of information from observed player bids. The gained knowledge about a player's evaluation of merchandise allows us to uncover new insights into player behavior, including the potential effects of anchoring.