Tiger Woods and Prospect theory…Do golfers also exhibit loss aversion?

An amazing paper by  Devin G. Pope and Maurice E. Schweitzer. Though, it is highly quant based but one does get some ideas.

They look at professional golfers’ behavior across various situations. And findings are in line with Prospect theory (PT). PT says people are risk averse while making gains and risk seekers while making losses. So when golfers are in a winning position they tend to become risk averse and while in a losing position take higher risks:

Although experimental studies have documented systematic decision  errors, many leading scholars believe that experience, competition,  and large stakes will reliably extinguish biases. We test for the presence of a fundamental bias, loss aversion, in a high-stakes context:  professional golfers’ performance on the PGA Tour. Golf provides a  natural setting to test for loss aversion because golfers are rewarded  for the total number of strokes they take during a tournament, yet  each individual hole has a salient reference point, par. We analyze  over 2.5 million putts using precise laser measurements and find  evidence that even the best golfers—including Tiger Woods—show  evidence of loss aversion.

The authors track this loss aversion in fascinating manner. So you see how each player performs when approaching par score. If their number of strokes taken is more than par, they see golfers taking higher risks. And if below par they turn risk averse and just try and reach their goal.

In contrast to the normative account, we find that golfers are significantly influenced by the reference point of par. When golfers are “under par” (e.g., shoot a  “birdie” putt that would earn them a score one stroke under par or shoot an “eagle”
putt that would earn them a score two strokes under par) they are significantly less  accurate than when they attempt otherwise similar putts for par or are “over par”  (e.g., shoot a “bogey” putt that would earn them a score one stroke over par or shoot  a “double bogey” putt that would earn them a score two strokes over par). Though  we analyze each of these types of putts, most of the putts in our data involve birdie  and par putts, and we summarize our results with respect to these putts. For example, on average, golfers make their birdie putts approximately 2 percentage points  less often than they make comparable par putts. This finding is consistent with loss  aversion; players invest more focus when putting for par to avoid encoding a loss.

I hardly follow/know much of  golf. But the findings are just amazing.

And one could apply these findings into other sports as well.

Take cricket.

  • What happens when players approach personal milestones like 100/200 run in an inning? Do they become more cautious  (loss averse) and in the process get out? Though this does not apply to all players like Sehwag who actually seek risks approaching milestones trying to achieve it quickly.
  • How do players start their innings? Is it more on the loss-averse side trying to get off the mark by taking a cautious single or risk-seeking by trying to hit out?
  • This is particularly apt during batsmen out of form. How do they react? Hit out or slog? Which is more useful finally?
  • In case of bowlers, I am not sure how to apply.
  • When do captains turn risk averse vs risk seekers. People say Dhoni is a defensive captain vs Ganguly who was seen as an aggressive captain. Can we spot certain empirical biases to show this?

Data on this will be tough to get unlike golf. As one will have to segment matches, find situations which leads to this behavior  and so on.

One could do similar studies on soccer as well especially during penalties.  data would be tough again..

Superb stuff.




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