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Risk Taking Behavior in Tournaments: Evidence from the NBA

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  • Grund, Christian

    (RWTH Aachen University)

  • Höcker, Jan

    (University of Würzburg)

  • Zimmermann, Stefan

    (University of Würzburg)

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.

Suggested Citation

  • Grund, Christian & Höcker, Jan & Zimmermann, Stefan, 2010. "Risk Taking Behavior in Tournaments: Evidence from the NBA," IZA Discussion Papers 4812, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4812
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Should losing NBA teams take 3 point shots?
      by Ariel Goldring in Free Market Mojo on 2010-08-30 19:07:21

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    More about this item

    Keywords

    risk taking; NBA; basketball; tournaments;
    All these keywords.

    JEL classification:

    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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