We present the results of an experimental study of the Price is Right bidding game. In the game, four bidders guess sequentially the price of an item. The player, whose guess is closest to the actual price without exceeding it, is awarded the prize. We compare the data of our experiment with field data collected by Berk, Hughson, and Vandezande (AER 1996) from the television game show. In their data they find frequent deviations from the subgame perfect equilibrium. We find that our experiment reproduces the empirical patterns observed by Berk et al. Experience with the decision situation increases the incidence of optimal decisions. The ability to associate individual subjects with their decisions has a significant effect on behavior.

Co-author Charles Noussair