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INCIDENCE AND CONSEQUENCES OF RISK‐TAKING BEHAVIOR IN TOURNAMENTS—EVIDENCE FROM THE NBA
Author(s) -
GRUND CHRISTIAN,
HÖCKER JAN,
ZIMMERMANN STEFAN
Publication year - 2013
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2012.00499.x
Subject(s) - basketball , tournament , margin (machine learning) , affect (linguistics) , point (geometry) , relevance (law) , economics , association (psychology) , psychology , econometrics , computer science , political science , mathematics , geometry , archaeology , communication , combinatorics , machine learning , law , psychotherapist , history
We empirically explore the relevance and efficiency of risk‐taking behavior in tournaments. We use data from the National Basketball Association (NBA) and measure risk‐taking by the fraction of three‐point shots in basketball games. We examine how point differences between teams during games affect their subsequent risk‐taking behavior. It is found that teams that are trailing are more likely to increase their use of three‐point shots. We additionally analyze the consequences of this change in behavior. Enhanced risk‐taking is inefficient in the vast majority of cases and is only beneficial if a team is trailing by a rather large margin. We discuss possible explanations for these decision errors . ( JEL M5, D81, J30)