Lemke, Kelley publish second paper about decision-making in the hit game show Cash Cab

Professor of Economics Robert Lemke and Associate Professor of Psychology Matthew Kelley’s paper, published in Theory & Decision, is titled “Gender differences when subjective probabilities affect risky decisions: an analysis from the television game show Cash Cab.

The economics literature generally indicates that women are more risk averse than men, so Lemke and Kelley were not surprised when they found such a difference in both of their Cash Cab articles. Specifically, contestants in the Cash Cab are asked a series of trivia questions and receive money for each correct answer.  If they do well enough, they are given the opportunity to risk all of their winnings double-or-nothing on one last trivia question.  Almost half of all men accept this gamble, whereas barely thirty percent of women do.  In their most recent paper, however, Lemke and Kelley were able to go much farther and complete a finer-grained analysis of the factors that might underlie these gender differences in decision-making under uncertainty.  Interestingly, their analyses revealed that gender differences may present themselves because women and men differ in how they develop their subjective probabilities of success.

Men appeared to base their risky decisions on general aspects of their previous “good” play (e.g., the number of times they answered correctly) but not on their previous “bad” play (e.g., the number of wrong answers given or the number of answers given with little confidence).  In sharp contrast, women appeared to consider both good and bad play.  Ultimately, therefore, women were less likely to accept the gamble if they had previously answered questions incorrectly, but men failed to demonstrate this tendency.

Additionally, Cash Cab is structured so that questions become more difficult over time.  Thus, when deciding whether to risk one’s winnings on the double-or-nothing question, a contestant’s most recent play should affect his or her subjective probability of success more than early play when the trivia questions were much simpler.  However, similar to ignoring their bad play, men in the Cash Cab do not appear to sufficiently discount their early successes or give enough weight to their most recent performance.  Women, however, display the warranted objectivity in terms of the timing of their previous performance in that women tend to rely more heavily on their more recent play, whether good or bad, when deciding whether to risk their winnings.  Kelley says,“By focusing on recent good play and factoring in failures, we argue that women use the most relevant information available to them for the decision at hand.  For reasons unknown, men tend to prefer to largely ignore such information when determining their subjective probability of success.”

According to Lemke, “Some of the literature characterizes women as employing decision-making processes that are more intuitive and less based on mathematical probabilities compared to men—in short, that women are less rational than men.  Our results challenge this position. Whereas men may be more inclined to accept risk in general, the situation presented in the Cash Cab is unique in that a decision is made under uncertainty that can be related to a series of previous performance variables.  In this case, compared to men, the decisions of women are much more closely tied to previous performance and the structure of the game, both of which are arguably rational consequences of the design of the game.”