Deal or No Deal

I have always loved playing games. I grew up long before the video generation and most of the games I played as a child were board games or card games. It didn't really matter. I just loved competing against my family, friends or anyone else I could entice into playing.

I guess my love of games is why I also enjoy watching certain games shows on television. I don't watch all of them, preferring the ones that let me exercise my brain as I play along. There are also a few games that I find interesting because of the way the participants are put to the test in making sometimes life-changing decisions. One such game show is the highly popular Deal or No Deal.

Some of the allure of this game for me is the fact that it really is based on odds and probability even though I'm sure that is lost on many of the contestants they pick for the show.

For those unfamiliar with the show, it works like this. There are 26 cases containing dollar amounts from one cent to one million dollars. The player chooses one case that is his to keep or he can sell it back the "The Banker." The player must then select cases to open eliminating some of amounts displayed on the board. After the player opens the first six cases, he receives an "offer" with an amount to sell his case. If does not take the deal, he must open up five cases before the next offer, then four, three, two and then eventually one case at a time. As each case is opened the likelihood of the player having a valuable cash amount in his or her own case decreases or increases.

In the beginning the amount offered to buy the case is low. This is done to entice the contestant to keep playing. But after the first few rounds the offer is based on the amount of money left in the unopened cases divided by the number of cases remaining. If the amount offered is high, it tests the player's emotional fortitude to take the offer or quit. There are two emotions that are linked to the player's decision.

Emotional Decisions

Several years ago when I started trading stock options, my mentor told me that for most people financial decisions were based the emotions of fear and greed. You are either afraid you will lose the money you have or you are greedy and want more. He told me that to be successful you have to take the emotion out of the decision and base it on the facts at hand and weigh the risk versus the rewards.

During a recent episode of Deal or No Deal, I saw a contestant make his decision on emotion that was neither fear nor greed. It was a special edition of the show with a top prize of $2 million. He was offered $467,000 for his case and when he turned down the offer he said, "I don't care about the money, I'm having fun!"

I have heard this comment before. It is usually made by someone who has gone to the casino, won a small jackpot and then lost it all back. They justify their decision to keep playing with the excuse that they were merely having fun.

Many viewers watch Deal or No Deal and fantasize about what they would do if they were the contestant. However, anyone who plays casino games has actually played a version of this game.

Your Call

When you win money at the casino, it is similar to receiving an offer from the Banker. If you decide to "take the deal" you cash out your winnings and go home with your money. If you decide not to "take the deal" you keep playing with the hopes of winning more money.

Sometimes casino players get caught up in the excitement of playing the games and they become like the contestant on the TV show and forget that there is real money at risk. The best way to handle this is to take a break for a few minutes if you win a jackpot and try to take the emotion out of your decision to keep playing or not. Sometimes it is better to "take the deal" and go home a winner.

Until next time remember:
Luck comes and goes.....Knowledge Stays Forever.