High stakes, big money, and a tricky choice. That’s the world of Deal or No Deal.
My cousin Warwick recently stepped into it and came away with a priceless lesson in how our brains handle risk.
The premise of the TV show is simple: you pick a case with an undisclosed amount of money, then eliminate the others while the “Banker” offers you cash to quit.
The tension comes from deciding whether to take the sure deal or gamble on what’s left in your locked case.
Warwick had a rough run. One by one, the high-value cases disappeared, leaving just two: $7,500 and $750.
The Banker offered $3,750.
Warwick took it, and honestly, I wasn’t surprised.
Even though he came to the studio that day with nothing, and winning $1 would have technically been a win, loss aversion was at work. We’re psychologically wired to prefer the certainty of a small gain over risking a bigger loss.
Anchoring plays a role too. When $100,000 is on the table, a $10,000 offer might seem tiny. When $50,000 is the top value, that same $10,000 suddenly looks very attractive.
These psychological tendencies affect business decisions every day. Whether negotiating a deal, setting budgets, or evaluating investments, we often overvalue avoiding losses and let initial figures anchor our perception of value.
Turns out, the biggest deal when making a deal isn’t the number itself, it’s the reference points around it.
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