Do professionals get it right? Limited attention and risk-taking behaviour

• Autores: Reto Foellmi, Stefan Legge, Lukas Schmid
• Localización: Economic journal, ISSN 0013-0133, Vol. 126, Nº 592, 2016, págs. 724-755
• Idioma: inglés
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• Resumen

  • 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.