Are you more risk-averse than a 5th grader?

The wife, the kids and I were watching the cute game show “Are You Smarter Than a 5th Grader?” and all of a sudden some kind of game theory/philosophy seminar broke out.

The contestant, a woman named Stephanie, had reached the final question, worth $1 million. She had earned $500,000 by correctly answering the previous question. If she got the million-dollar question wrong, she would walk away with $25,000.

She could see the subject of the final question before deciding whether to answer it, and she could walk away at that point with the $500,000. But once she saw the question, she had to answer.

The subject was music. Stephanie looked disappointed, but she also said she’d taken violin lessons for 10 years. She was 25 years old, I guessed and a post-show Google search confirmed. Her name is Stephanie Wambach. She’s from St. Louis, where the wife and I used to live—and which requires that I say she went to Marquette High School. And she went to the wife’s alma mater, Indiana University. This is all foreshadowing, in a kind of lame way.

Here’s a clip of the last few minutes of the episode, uploaded to YouTube in 2007.

Stephanie had mostly breezed through the answers, on questions ranging from second- to fifth-grade level, struggling only a little and using just one of her three “cheats.” “Fifth-grade level” makes these questions sound easier than they are. They’re not rocket science, but fifth-grade questions aren’t pushovers. If you’re not familiar with the subject, or don’t remember it from fifth grade, you’re sunk. One of the fifth-grade questions Stephanie had answered asked what country Sweden shared its longest border with.

Now she thought over whether to go for the $1 million on the music question or “drop out” with $500,000.

“You have to go for the million,” I said to the wife. Oh, no, said the wife. You have to take the half-million. “If she gets it wrong she’d be giving away $475,000,” the wife said. That’s how the host, Jeff Foxworthy, had phrased it as Stephanie struggled with her decision: “If you answer the question incorrectly … you give back $475,000.”

That comment seemed designed to push her toward not going for the million, which struck me as odd, since a contestant winning the million bucks would be a home run of a moment for the show. Foxworthy should have been all Dr. Evil: “Think about it: A MILLion dollars,” as if $1 million were a lot of money or something. But he explicitly said he wanted to “talk about the downside.”

“She’s not giving back anything,” I said. “She walked in empty handed. The floor for her, the worst thing that can happen, is she walks out with $25,000. That’s a pretty damn good floor. She’s ‘giving back’ $500,000 by not trying for the million.”

And there you have it. Two fundamentally different ways of looking at risk.

The wife: How can you live with herself if you’d “given back” $475,000 by getting the last question wrong.

Me: Any time I can bet $475,000 of house money to win $500,000, I’m putting the money down as if it weren’t mine—which it isn’t. I never really “had” dollars 25,001 through 500,000 any more than Stephanie “had” dollars 500,001 through 1 million.

Get the last question wrong and the consolation prize would be $25,000. I’d live with myself just fine. I’d walk out thinking, “Losing stinks, but it was the right bet.” And if the same situation came up again, I’d do the same thing.

Stephanie opted out. Interesting: A male person close to her had been in the audience the whole show holding up a sign that said “Go for the $1 million.” Is this a gender thing? Sample size of two so far. The guy, a friend, later wrote a blog post about it.

Foxworthy asked Stephanie if she wanted to see the question and she quickly said, “No!” That followed from her first decision. She didn’t want to risk feeling terrible if she knew the answer, even though, given her decision, she must have thought there was a good chance she wouldn’t know the answer.  Wouldn’t it have felt great to know she’d made the right call?

Fortunately, she quickly changed her mind, since it’s hard to imagine the show not revealing the question. She said, “All right, fine,” I think in response to shouts from the audience. Foxworthy revealed the question: “In the 1720s, what man composed a series of violin concertos known as ‘The Four Seasons’?”

When Foxworthy, reading the question off a video display, got to the word “man,” Stephanie put her hands on her head and gasped, “Oh my God!” Then she crumpled onto the podium. She recovered quickly, took it well, flashing a smile. Foxworthy had her look into the camera and say what I gather is the show’s tag line, but she customized it:

“I guess I’m not smarter than a fifth grader,” she said, “but if I woulda answered the question, I would have been!”

I think that’s right. Even if her answer had been wrong.