Jeopardy! might not be the most exciting game show on television, but when contestants reveal their final responses -- and wagers -- the tension is often palpable. That’s because no matter how foregone the conclusion may seem, one can never underestimate the propensity of even the shrewdest of competitors to bet the farm just to stay on top.
It’s a seemingly irrational compulsion, which, according to a recent study, is a perfect example of “the liability of leading” -- a phenomenon that researchers say prompts business leaders to take excessive risks to maintain their supremacy.
“In the study of management, we often use the famous quote, ‘He won the battle but lost the war.’ That’s a tendency of a lot of people,” explains New York University’s Zur Shapira. “They focus on what they have right now. They want to win.”
Along with NYU's Elizabeth Boyle, Shapira co-authored “The Liability of Leading: Battling Aspiration and Survival Goals in the Jeopardy! Tournament of Champions,” which appeared last month in the journal Organization Science.
They found that the tendency to take on unnecessary risk is on full display when top contestants go head to head -- such as in Jeopardy's Tournament of Champions.
Unlike in the regular season, where winning is always the goal, in the tournament contestants don't necessarily have to finish in first place to advance. There are four spots in the semi-finals reserved for “wild cards” -- non-winners who achieve the highest scores.
Advancing to the semis is, however, contingent on amassing a certain amount. By crunching the data from 55 games in 11 tournaments from 1990 to 2001, Boyle and Shapira found that contestants who achieve $8,000 in the qualifying round have an 80 per cent chance of advancing to the semis as wild cards; meanwhile, finishing with $9,300 makes moving on a near certainty.
As post-mortem interviews with contestants confirmed, these thresholds were no secret.
“This is a group of real professionals, they know everything [about] the game,” says Shapira. “It’s not a question that we have a sample of people who are uncertain, or not cognizant. These guys know exactly the whole thing.”
Yet despite this knowledge, when the final clue was revealed, more than half of leaders bet to win -- a decision that ended in their elimination 56 per cent of the time.
“If they looked at the whole big picture and said, ‘My goal is to get to the semi-finals,’ they would bet almost nothing or zero. But in the context of a competition, the leader seems to focus on staying in the lead, and that causes them to take too much risk,” says Boyle.
When it came to leaders with $9,300 or more -- the threshold for almost guaranteed advancement -- 43 per cent placed some sort of positive bet.
"All they could do was reduce their chances of qualifying, and they still did it," says Boyle, who notes that the tendency to take these kind of "excessive risks" was "much greater among the leaders than the followers."
According to the researchers, the “liability of leading” should act as a warning to Jeopardy! contestants and business leaders alike.
“There is an excessive value to being in the lead. Once you have it, you don’t want to lose it, regardless of if you would have been more profitable as a strong No. 2,” says Boyle. “That might be causing them to take too much risk.”
In this video, from the 2001 Tournament of Champions, leader Michelle (middle) has $7,800 and bets $6,201 in an attempt to shut out second-place Ryan (right), who has $7,000. But Ryan bets $1,000 to reach $8,000 -- the threshold amount. Even though both Michelle and Ryan got the answer wrong, Ryan's cautious bet, aiming at the $8,000 mark, won him the game. Had Michelle bet only the $200 she needed to reach $8,000, she would have won.