The “big peanuts” hypothesis

“My coauthors and I have a conjecture for why this happens that we call the “big peanuts” hypothesis. The idea is that a certain amount of money can seem small or large depending on the context.

  • Recall from the List that people were willing to drive across town to save $ 10 on a small purchase but not a big one. Ten dollars in the context of buying a new television seems like “peanuts,” or not enough to worry about. We think the same thing happens on this show.
  • Remember that the average prize pool in this game is about $ 20,000, so if a pair of contestants find themselves in a final where the pot is just $ 500, it feels like they are playing for peanuts.
  • If they are playing for peanuts, why not be nice, especially on national television? Of course, $ 500 would be considered an extraordinarily large prize to be divided in the context of a laboratory experiment.”

    — Misbehaving: The Making of Behavioral Economics door Richard H. Thaler