Come Dine With Me: the economics

It’s insufficiently appreciated that Come Dine with Me raises some profound issues in economics. Here are three:
1. The importance of norms of fairness. The format of CDWM is simple. There are four people. Each hosts a dinner party for the other three. The guests score their host out of 10. The person with the highest score wins £1000.
In this game, the optimum strategy for a guest is to score their hosts zero. This would mean the maximum score one’s rival hosts could make would be 20, which in a normal game would not usually be sufficient to win. So, if your three rivals play normally, scoring them zero greatly increases your chances of winning.
If everyone knows this, we end up in a Nash equilibrium in which everyone scores zero; this is a one-shot game with scores revealed only after all four dinner parties, so tit-fot-tat doesn‘t apply.
But this never happens. Even contestants who claim to want to win score their rivals reasonably. This suggests that norms of fairness overwhelm selfish optimization*.
This raises the question, though: why is CDWM so different from Golden Balls - which is a pure Prisoners‘ Dilemma game - where we often see the selfish defect-defect strategy?
The answer, I suspect, lies in the abundance effect. The difference between CDWM and Golden Balls is that in the latter money is much more salient. And research (pdf) shows that, the more people think about money, the more selfish they behave.
The lesson is that context - not just incentives - matter.
2. The trickiness of inter-personal comparisons of utility. Let’s assume that games are scored purely according to perceptions of fairness. It doesn’t follow that everyone has an equal chance.
Take, for example, two people. One is a gourmand, used to fine dining and the highest standards. The other has low expectations. Our gourmand might well score a fair-to-middling dinner much lower than the diner with low standards.  On this account the gourmand would have more chance of winning than the other diner, even if both are cooks of equal ability.
One might question the justice of this. More importantly, it raises the question: why should expressed preferences carry so much weight when they can be heavily affected by factors which should perhaps be irrelevant?
3. The importance of ordering. The four people are strangers. This means the first host is in a different position to the last host. The first is likely to judged heavily on his food, as the guests barely know him. But later hosts are more likely to be judged on personality as well, as by then the four have gotten to know each other. 
This can cause diners to regret their earlier scores. We saw this last night, when Rachel said that, had show known how big an arse Stuart - the first host - was, she would not have scored him so highly.
This poses a big problem for conventional rational choice economics. It typically takes preferences as given, and revealed by choice. However, CDWM shows that preferences are sensitive to the order in which options appear. For Rachel, the choice: “score Stuart, then score Josh“ yielded a different result than “score Josh, then score Stuart“ would have done.  I suspect this is related to Allais’s paradox.
So, CDWM raises important issues about the nature of rationality and preferences. Watched even in narrow economists' terms, it is much more interesting than politicians' waffle about the crisis.
* Or it could be that the producers just tell the contestants not to play silly buggers.

Comments

[Tom P]

"* Or it could be that the producers just tell the contestants not to play silly buggers."

Actually I did see one show where one of the contestants gave everyone poor scores (ie all less than 5).

Incidentally there was one show where the host got a restaurant to cook all the courses. She told one of the other diners who inexplicably still gave her a high mark, and she went on to win the money.

[ortega]

In one case, one contestant said the dinner was 'too good' and so she gave 1 point.

[Tom]

My guess would be that people don't want to be seen to be total arses on TV*. On Goldenballs, while taking the money is selfish, it's well within the reasonable bounds of the game - it's one of only two options, and plenty of people take that option. Scoring everyone zero on CDWM simply to win is so far outside the expectations of the show that it would mark someone out as an outstandingly nasty person.

* Of course, plenty do end up doing that on CDWM anyway. But they don't usually realize it at the time.

[charlieman]

Following on from Tom, I don't think that £1,000 is enough reward for consciously and publicly acting like an arse hole. If the prize was £10,000, you'd get a different show and different contestants.

[Neil]

"I don't think that £1,000 is enough reward for consciously and publicly acting like an arse hole."

Yet bloggers and blog commenters do it for nothing...

[King]

"On this account the gourmand would have more chance of winning than the other diner, even if both are cooks of equal ability."
Often the gourmand within the group is slated by the other diners for being a snobby know-it-all. The competition then becomes one of popularity rather than ability. This can also be seen in other such reality shows as 'Strictly Come Dancing' and 'X-Factor'.

[john b]

Adding to Tom's point, there's also a strong element of reciprocity to hospitality - it's poor form for tribesmen to murder their hosts or guests from a different tribe, even if they'd happily kill them on the battlefield. So being an arse towards someone who's wined and fed you is much more arse-like behaviour than being an arse to a stranger.

[Steven]

Since watching the show yesterday I have, like you, been mulling over what we were treated to.

In your first analytic category - the norm of fairness - you wrote with a footnote that there is potentially an external regulator (the TV producer - but perhaps it could quite simply be the self regulatory "my public image is worth more than a grand" as you intimate) who requires that each contestant score the others based solely on their experience that evening. If you don't you will stand out as a hole (I shall leave what type of hole to your imagination!). This may give a little leeway to under score opponents, but not much. Whichever form the regulator takes, it was interesting that even Stuart (who proclaimed the objective of winning from the outset) felt he couldn't transgress this rule, giving his closest rival a respectable 7 out of 10 after having admitted that his own meal had not been as good as Josh's effort. I thought I perceived a moment of "I hope I haven't over scored him" as he gave his score. He was clearly judging based on the Keynsian principle of the beauty contest where you win by guessing what the other judges score. It also implies that he would have scored his own effort with no more than a seven. I don't recall if he equated how he felt his evening as host had gone with a hypothetical score however I can't imagine that a person with such a self congratulatory air would put themselves below a 9. In the end he won by just one point.

While outright manipulation of the scores was regulated enough for Stuart to comply, he obviously felt manipulation of other people’s preferences by generating a partisan atmosphere using private jokes with other guests, and overtly placing pressure on his hosts did not contravene the norm of fairness. In so doing he was manipulating your third analytic category: the importance of ordering. A "short and distort" type tactic.

Stuart played the game with cunning. There was a certain amount of luck involved but he was able to minimise the risk of being out done.

Ultimately the final edit of the programme gave us several reasons to think that Stuart is indeed a hole of significant proportions, including a scene reminiscent of some people's image of Stuart's contemporaries on Wall St. and in the City: fanning himself with his dubiously gotten gains whilst barely concealing his conceit that he was somehow the wisest of the sorry bunch.

I wonder if the next series will include a claw-back of prizes based on a public phone poll when the programme airs.

[Glenn Cassidy]

Nice observations, and I agree, except on point #3. Order does matter in how the game is played, but I don't think it's fair to conclude that order alone affected preferences (and thus demonstrates a violation of rationality.) With each interaction, the contestants learned more about the other contestants and the grading standards and other norms. In particular, Rachel did not know that Stuart was an arsehole until later. Presumably, had she known at the first dinner what an arsehole he was, she would have graded him lower based on the added information. This is not evidence of irrationality.

[botogol]

people aren't playing this trying to win £1000 - they are playing to try and look good on the telly.

scoring the others with a zero would make them look bad on telly.

[Hopi Sen]

Great post - another example of the ordering factor I saw was in a celebrity CDWM with Edwina Currie and Christopher Biggins. You got the sense that Biggins was almost entirely being rated on having been both a good guest at everyone elses dinners and a good social host at his own, with the result that all the other guests seemed to want _him_ to win - The food was incidental.

I think the CDWM celeb money goes to charity though, so this tendency may be exaggerated in this case.

[Sarah Danes]

nice post...
i really like this...

thnks...

http://www.pnrinfoline.com

[Nike Shox TL3]

I'm right there with you. So sad about the end of summer. I found a single red leaf laying on the lawn this morning and wanted to cry! B is absolutely adorable and I love this bright fun page!!

[Nike Shox TL3]

I'm right there with you. So sad about the end of summer. I found a single red leaf laying on the lawn this morning and wanted to cry! B is absolutely adorable and I love this bright fun page!!

[Claire]

The fairness of the voting can only be fair if the contributors vote themselves and are not forced into giving a number the crew want them to give! I was on it and was not allowed to give my own grade for the evening!

[Judecalverttoulmin.blogspot.com]

Claire, which show were you on? :)

Fabulous article by the way, very entertaining and have shared on fb, cheers.