Bidding behavior in the price is right game: An experimental study

In this paper, we present an experimental test of a bidding game identical to the one seen on the television game show "the price is right". Four players make sequential guesses about the price of an item and the player whose guess is closest to the price without exceeding it wins the item. Patterns of suboptimal behavior in our experimental data are consistent with field data from the actual game show analyzed by Berk et al. [Am. Econ. Rev. 86 (1996) 954]. Several treatments that simplify the game are used to identify factors that cause subgame perfection to predict poorly.