How to Explain the Results of the Richard Thaler's 1997 Financial Times Contest

Authors

Olga Kosheleva, The University of Texas at El PasoFollow
Vladik Kreinovich, The University of Texas at El PasoFollow

Publication Date

3-2018

Comments

Technical Report: UTEP-CS-18-21

Abstract

In 1997, by using a letter published in Financial Times, Richard H. Thaler, the 2017 Nobel Prize winner in Economics, performed the following experiment: he asked readers to submit numbers from 0 to 100, so that the person whose number is the closest to 2/3 of the average will be the winner. An intuitive answer is to submit 2/3 of the average (50), i.e., 33 1/3. A logical answer, as can be explained, is to submit 0. The actual winning submission was -- depending on how we count -- 12 or 13. In this paper, we propose a possible explanation for this empirical result.