Operations, Information and Decisions Papers

Document Type

Journal Article

Date of this Version

2-2011

Publication Source

American Economic Review

Volume

101

Issue

1

Start Page

129

Last Page

157

DOI

10.1257/aer.101.1.129

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.

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Date Posted: 27 November 2017

This document has been peer reviewed.