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Conditioning competitive risk: Competitors’ rank proximity and relative ability

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  • Miller, Danny
  • Pastoriza, David
  • Plante, Jean-François

Abstract

We study rank-order tournaments to examine how the influence of the opportunity/threat of gaining/losing rank on competitive risk taking is moderated by the ability of an actor vis-à-vis its contiguous competitors. Consistent with social comparison theory, we find that we are better able to predict competitive risk by taking into account the interaction between short-term rank proximity and enduring ability – risk taking is triggered mainly when contiguously ranked competitors have commensurate ability. We study these notions in an ongoing sequence of real-time decisions professional golfers take to advance or avoid losing rank in 503 PGA Tour tournaments between 2003 and 2016. Our research provides new insights into risk taking and competitive blunders in business.

Suggested Citation

  • Miller, Danny & Pastoriza, David & Plante, Jean-François, 2019. "Conditioning competitive risk: Competitors’ rank proximity and relative ability," Journal of Economic Psychology, Elsevier, vol. 73(C), pages 161-175.
    • Handle: RePEc:eee:joepsy:v:73:y:2019:i:c:p:161-175
    DOI: 10.1016/j.joep.2019.06.008
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    1. Pastoriza, David & Alegre, Inés & Canela, Miguel A., 2021. "Conditioning the effect of prize on tournament self-selection," Journal of Economic Psychology, Elsevier, vol. 86(C).

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