Do Professionals Get It Right? Limited Attention and Risk-taking Behaviour

Published

Journal Article

© 2016 Royal Economic Society Does information processing affect individual risk-taking behaviour? This article provides evidence that professional athletes suffer from a left-digit bias when dealing with signals about differences in performance. Using data from the highly competitive field of World Cup alpine skiing for the period of 1992–2014, we show that athletes misinterpret actual differences in race times by focusing on the leftmost digit, which results in increased risk-taking behaviour. For the estimation of causal effects, we exploit the fact that tiny time differences can be attributed to random shocks. We find no evidence that high-stakes situations or individual experience reduce the left-digit bias.

Full Text

Duke Authors

Cited Authors

  • Foellmi, R; Legge, S; Schmid, L

Published Date

  • May 1, 2016

Published In

Volume / Issue

  • 126 / 592

Start / End Page

  • 724 - 755

Electronic International Standard Serial Number (EISSN)

  • 1468-0297

International Standard Serial Number (ISSN)

  • 0013-0133

Digital Object Identifier (DOI)

  • 10.1111/ecoj.12375

Citation Source

  • Scopus