Center for Behavioral Decision Research

CBDR : Seminar Series : Seminar by Devin Pope

Under-Par Job Performance: Myopic Loss Aversion in a High-Stakes Market

	presented by Devin Pope (University of Pennsylvania)


	Thursday, April 2	link to paper
	12:00
	PH 223D	link to Speaker's Site

	Abstract:

	Although experimental studies have documented systematic decision errors, many leading scholars believe that experience, competition, and large stakes will reliably extinguish these “biases.” We test for the presence of a fundamental bias, myopic loss aversion, in a high-stakes context: professional golfers’ performance on the PGA TOUR. Golf provides a natural setting to test for myopic loss aversion since 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 1.6 million putts and find strong support for myopic loss aversion. Golfers are significantly more likely to make par putts than otherwise similar birdie putts. On average, this bias costs top golfers over $1.2 million in tournament winnings per year.

	Host at CMU: Loewenstein