Hello ,

Americans are worse at The Price Is Right than they used to be. On the game show, which has been running since 1972, four contestants are asked to guess the price of consumer products, like washing machines, microwaves, or jumbo packs of paper towels. The person who gets closest to the actual price, without going over, gets to keep playing and the chance to win prizes like a new car. In the 1970s, the typical guess was about 8% below the actual price. These days, people underestimate the price by more than 20%.

This finding comes from research released in 2019 by Jonathan Hartley, at Harvard University. A longtime fan of the show, Hartley was inspired to conduct his research after reading a paper that reveals contestants don’t use optimal bidding strategies. Hartley wondered what else the data might show. He found that the accuracy of people’s guesses sharply decreased from the 1970s to the 2000s, and then stabilized in the 2010s.

So, what accounts for guesses getting so much worse? Hartley thinks there are three economic factors that are the most likely culprits:

First, inflation in the US was much higher in the 1970s and 80s. When inflation is high and variable, people become more attentive to prices, noticing they are paying more for goods than before.

Second, the rise of e-commerce may have made people less sensitive to price. As a result, people may feel less of a need to do price comparisons.

Third, there are more products than ever. There are 50 times as many products at a grocery store than 80 years ago. This also might make it harder for The Price Is Right contestants, along with the rest of us, to know how much stuff costs."