Priceonomics

How do you convince someone you're honest? And on a game show of all places?

In the British game show “Golden Balls,” contests conclude with a round of “Split or Steal,” a classic game theory setup. The situation: the two remaining contestants have a pool of £13,600 ($22,239) in winnings. Each must decide whether to commit to splitting this pool evenly or stealing it all. If both decide to split, each contestant walks home with £6,800. However, if one person splits and the other person steals, then all £13,600 goes to the thief. But if both decide to steal, neither contestant wins any money. 

Source: Wikipedia

While the contestants are allowed to talk to each other prior to making their “Split or Steal” decision, the ultimate decision is made privately. So, while the best option for both parties would be to split and each walk home with £6,800, the temptation of stealing all £13,600 is high. 

In this round of Split or Steal, however, Nick decides to change the terms of the game. He insists that he will choose to steal, regardless of what Ibrahim decides. If Nick is telling the truth, then Ibrahim can either split, in which case Nick will get all £13,600, or steal, in which case both walk home with £0.

In both cases, Ibrahim gets nothing. However, Nick also promises to split the £13,600 with Ibrahim after the show if Ibrahim chooses split. It's a clever gamble into coercing Ibrahim into choosing split, as the hope of sharing the spoils after the show might overpower Ibrahim’s desire to punish Nick for being a jerk. (Although there's also no guarantee that Nick will keep his word outside the confines of the game.)

What ultimately happens? Ibrahim chooses split and Nick … also chooses split. Both walk away with £6,800. Classic.

Golden Balls is a cheesy game show, but it's also a dream for social scientists whose modest research budgets only allow for putting a few dollars at stake when they ask participants to play games like this. The “Split or Steal” round was the subject of a study conducted by researchers at Erasmus University Rotterdam and the University of Chicago. (The paper can be read here). They found that contestants were willing to cooperate (choose “split”) 53% of the time. But they did find some variations. Younger men, for example, were much less likely to cooperate, while everyone was more likely to choose steal when facing an opponent who tried to "vote them off" an earlier round.

The researchers also noticed what they dubbed the “big peanuts” phenomenon. While the just above 50% average held for jackpots ranging from a few thousand to one hundred thousand pounds, the rate of cooperation shot up to 70% when the contestants were only playing for a few hundred pounds. Why? It seems that compared to the show's typical jackpot, the pool seemed relatively small. No reason to be a jerk on television over peanuts. Of course, the researchers noted that when not compared to a huge cash prize, hundreds of dollars still seem like some pretty big peanuts.

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