Is Tiger Woods Loss Averse? Persistent Bias in the Face of Experience, Competition, and High Stakes

Devin Pope and Maurice E. Schweitzer

American Economic Review, 2011, vol. 101, issue 1, 129-57

Abstract: 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. (JEL D03, D81, L83)

Date: 2011
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