Risk Taking in Competition: Evidence from Match Play Golf Tournaments

42 Pages Posted: 15 May 2014

See all articles by Serkan Ozbeklik

Serkan Ozbeklik

Claremont McKenna College - Robert Day School of Economics and Finance; Claremont McKenna College

Janet Kiholm Smith

Claremont McKenna College - Robert Day School of Economics and Finance

Date Written: April 4, 2014

Abstract

We test hypotheses regarding risk taking behavior of competitors in settings characterized by one-on-one, single elimination tournaments. We draw data from 579 professional golf matches and over 18,000 holes from 2003-2013 in tournaments where match-play scoring is used rather than stroke-play. Because of the uniqueness of the data, we are able to provide clean empirical tests of how risk taking is affected by horizon effects (holes remaining), peer effects arising from heterogeneity in player abilities, match status (whether behind or ahead), and the difficulty of the task/project (hole). The findings are applicable to corporate settings where only a few rivals compete for a prize, such as a winning bid, a promotion, market share dominance, patents, etc. Other applications include litigation contests and political elections.

Keywords: tournament incentives, risk taking, peer effects

JEL Classification: D81, L8, M5, G30

Suggested Citation

Ozbeklik, Serkan and Smith, Janet Kiholm, Risk Taking in Competition: Evidence from Match Play Golf Tournaments (April 4, 2014). Claremont McKenna College Robert Day School of Economics and Finance Research Paper. Available at SSRN: https://ssrn.com/abstract=2429009 or http://dx.doi.org/10.2139/ssrn.2429009

Serkan Ozbeklik

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

Claremont McKenna College ( email )

Robert Day School of Economics and Finance
Claremont, CA 91711
United States

Janet Kiholm Smith (Contact Author)

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States
909-607-3276 (Phone)

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