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Deal or No Deal?

Deal or No Deal is a game where a contestant faces off against the banker and it has to do a lot with decision making. The contestant wants to leave the game with the most amount of money whereas the banker wants the contestant to take as little as possible. The contestant is presented with 26 suitcases with amounts that range from $.01 to $1,000,000. Contestant is asked to open a certain number of suitcases and the cash amounts of the opened suitcases are no longer available. After the certain number of suitcases is removed from the game, the banker offers the contestant amount of money to try to get him exit the game.

What I found to be interesting from this paper is that the Nash Equilibrium changes during the game since we haven’t had an example in class that does this. The options that the contestant and the banker have are “deal” or “no deal” and offering high or low respectively. If the banker offers low, the contestant is most likely going to say no deal, which is the dominant strategy for the contestant. As the contestant opens more suitcases, the banker has to change his/her strategy by offering a bit more so that the contestant can contemplate if they should take the deal. The contestant has to figure out if what the banker is offering is acceptable to what they could potentially get in the last suitcase. However, if the contestant takes too many risks and never accepts the banker’s offers they could also end up not getting as much as the banker might have offered but the contestant should also never accept an offer if they know they are guaranteed to do better than the offer.

http://www.isveum.com/downloads/DoND.pdf

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