Risk Taking Behavior in Tournaments: Evidence from the NBA

Christian Grund, Jan Höcker () and Stefan Zimmermann ()
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Jan Höcker: University of Würzburg
Stefan Zimmermann: University of Würzburg

No 4812, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We empirically explore the relevance of risk taking behavior in tournaments. We make use of data from the NBA season 2007/2008 and measure risk taking by the fraction of three-point shots. Current heterogeneity of teams is taken into account by intermediate results. It turns out that indeed teams who are behind increase the risk in terms of more three-point attempts. We additionally analyze the consequences of this change in behavior. Enhanced risk taking is inefficient for the vast majority of cases and only beneficial in terms of a higher winning probability if a team is behind with a rather large amount of points. We discuss possible explanations for these decision errors.

Keywords: risk taking; NBA; basketball; tournaments (search for similar items in EconPapers)
JEL-codes: M5 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2010-03
New Economics Papers: this item is included in nep-cbe and nep-spo
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Published - revised version published as 'Incidence and Consequences of Risk Taking Behavior in Tournaments - Evidence from the NBA' in: Economic Inquiry, 2013, 51 (2), 1489–1501

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