Wednesday, June 17, 2009

Pros Acting Irrationally

Fascinating article in yesterday's NY Times: a study of over 1.6 million putts made by professional golfers shows that the pros are slightly more likely to make a par putt than to make a birdie putt of identical length. The study's authors believe that the data demonstrate the psychological phenomenon of "loss aversion": golfers try harder on par putts because they don't want to lose a stroke to par; whereas on birdie putts they have the psychological comfort of knowing that if they miss they can still make par.

The study is fascinating because it shows golfers acting irrationally. The golfer's goal is to do as well as possible in the tournament, and this goal is backed up by a large financial incentive. Whether a stroke is for birdie or par is irrelevant to the golfer's best strategy for the stroke. The study controlled for relevant factors, such as the golfer's current position in the tournament or the number of holes remaining. But the number of strokes taken on the hole so far and the relationship between that number and par are irrelevant -- a stroke is a stroke whether it's for birdie, par, or double bogey.

One expects casual players to make strategic misjudgments, just as a casual poker player will fall for the "sunk cost" fallacy and tend to stay in a pot to "protect" the amount he's bet so far, even though paying attention to that irrelevant figure may cause him to throw good money after bad. But professional poker players should be keenly aware of and should know how to avoid that error. Similarly, economists would predict that, with the big sums at stake, professional golfers would act rationally and learn to overcome the psychological pressures identified in this study. But they apparently don't. Humans befuddle economists again.

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