Watson was able to analyze the current situation and make a rational bet on Daily Doubles. It analyzed it's comfort in the category the Daily Double was in, and then used a regression model to pick the optimal bet size, which factored in how winning or losing the Daily Double would change Watson's chances of winning or losing the game.
I'm not really sure if Watson's model goes as far to consider other players' Daily Double behavior, or simply examines other players' scores. It would make sense to try and look at the game theory aspect though, especially in an iterative-game scenario. If a player bets hyper-aggressively on Daily Doubles (and Final Jeopardy) and gets most of them right, you'd think Watson would want to take that into consideration.
I'm not really sure if Watson's model goes as far to consider other players' Daily Double behavior, or simply examines other players' scores. It would make sense to try and look at the game theory aspect though, especially in an iterative-game scenario. If a player bets hyper-aggressively on Daily Doubles (and Final Jeopardy) and gets most of them right, you'd think Watson would want to take that into consideration.