Monday, June 19, 2017
Dean S. Karlan Yale University; Innovations for Poverty Action; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR) has written on Survivor: Three Principles of Economics Lessons as Taught by a Reality Television Show.
ABSTRACT: The reality television show Survivor has been a ratings success on CBS for over 16 years. In the show, 16 strangers are marooned in a remote location, required to compete in physical and mental challenges, and periodically vote to eliminate players from the game. The last person remaining wins one million dollars. I use this popular television show to demonstrate three important lessons from principles of microeconomics: (a) for individual decision-making, concepts like pride and honor may belong in the utility function, alongside more classical components such as consumption of goods and services, (b) thinking through how others will respond to your action is critical for good economic and strategic thinking, and (c) repeated interaction can help collusive behavior hold.