Taking risks in pro golf is usually a sign of desperation, IMO. If you avoid bogeys -- are risk averse -- you can count on being lucky a few times and making birdies. If you're under par you're likely to make some money. There are some courses that penalize you if when you are risk averse, magnifying the role of luck in the outcome.
-----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Jim Devine Sent: Tuesday, June 16, 2009 12:40 PM To: Progressive Economics Subject: Re: [Pen-l] Article on risk aversion Bill Lear wrote: > The article says that the irrational bias discovered in the study > "cost each golfer about one stroke tournament per which can translate > to hundreds of thousands of dollars in prize money". But isn't it > true that if each golfer gained one stroke per tournament, they would > be no better off in terms of prize money, as every golfer would be > similarly better off? it's collectively rational for all of them to be "excessively cautious" since it involves less work and the number of winners and their prizes are fixed. But it might be individually rational to be a "free rider," to take big risks. (Is this Tiger Woods? I don't know, since I don't know golf at all.) This type of behavior would push the entire group to stop being "excessively cautious." This is called positional competition. There can be informal "arms agreements" which prevent extreme competition. But these can be broken, causing an arms race (fancier & fancier equipment, more and more risk-taking, etc.) The good news is that it might make the game more exciting to the spectators. The equipment manufacturers (and the steroid sellers?) can also profit. It might turn into "extreme golf." -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
