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MECHANISM DESIGN OF INTERACTIVE QUIZ SHOWS:ARE SIMPLE QUESTIONS OPTIMAL?
Category: Economic Theory
Mechanism Design Sunday 25th August 2002, 09:30 - 11:00, Room: 4.6
Session Chair(s):
David Wettstein, Ben Gurion University, ISRAEL
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Abstract:
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In german TV, there recently have appeared a number of interactive
quiz shows. A usually very simple question is asked and
spectators may make a costly phone call. One of the callers is
selected randomly and, if he knows the answer, is allocated a
prize. The TV channel's revenue from these calls is the expected
number of callers times the price of the phone call. Simple
questions increase the number of phone calls since more spectators
know the answer. However, the likelihood of
winning for any caller decreases with each additional caller. I
analyze this trade-off in a Bayesian setting and find that the
most simple questions are optimal indeed.
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Find this file in the \Papers\1136\ folder of this CD-ROM.
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