Are Jeopardy players stupid?

[Outrider]

I was watching Celebrity Jeopardy the other day. It was the real thing, not the SNL skit, but what happened on the show was almost as funny as what usually transpires in the SNL version.

The players were: Seth Green, and two semi-obscure celebrities whose names I can't recall. Seth was winning by a comfortable margin entering final jeopardy. Here's what happened:

1. Obscure celebrity guy writes "I don't know" or something like that, wagers ALL of his money. Drops down to $0.
2. Obscure celebrity woman either does the same as the guy before her or simly gets it wrong. She wagers all of her money except for one dollar. She drops down to $1.
3. Seth Green writes some sort of comical answer, clearly knows he is incorrect, and still wagers all of his money. Drops down to $0.

So the woman won with a grand total of $1. It looked like Alex Trebek was trying really hard not to laugh at them. I was just stunned by their collective stupidity

Anyway, why do Jeopardy players insist on wagering large sums of money when they know that their answers are wrong? It's not just celebrities who do it, either. I constantly see regular non-celebrity players who lose everything even though they know full well that their answer is wrong.

Is there some aspect of the game I'm missing? Do you have to write down your wager before you see the question? Or do a lot of these people simply not understand the wisdom of holding onto their money when they don't know the answer?