Abstract
The convex payoff structure in professional golf rewards scoring volatility, giving rise to player types who succeed in spite of higher average scoring. The same risk incentives should influence all players to adjust risk strategies at key moments in tournaments when payoffs either crystallize or become particularly convex. This paper develops a simple theoretical framework, then explores the empirical evidence for strategic risk adjustment by players over the 2003–2012 PGA Tour seasons. Findings suggest that players respond measurably on average to risk incentives around the cutline, but much less so (if at all) to leaderboard position on the closing holes of a tournament. Both the payoff to risk and the technical capacity of players to add or subtract risk are estimated. Analysis of individual players indicates that some elite players are more risk responsive. Bias (e.g., loss aversion) is discussed along with other possible explanations for the apparent lack of risk response over the closing holes of a tournament.
- 1
Sometimes a player even wins an event after making the cut on the number, most recently in 2010 when this occurred twice. Rory McIlroy won the Wells Fargo Championship at Quail Hollow that year by a full four strokes and $1.17 million after making the 1-over par cut on the number, and Carl Pettersson won the Canadian Open.
- 2
In most tournaments, the field is cut to the lowest 70 scores, plus ties, following the second round. A few small field tournaments do not have a cut, and two others have later round cuts.
- 3
See Facey (2013).
- 4
ShotLink data were available for 2012 through the Barclays tournament, played August 23–26, 2012.
- 5
One event each season, now known as the Humana Challenge, was played over 5 rounds until a format change in 2012.
- 6
Events without a cut are excluded from this portion of the analysis.
- 7
The weights are calculated as follows: w=(Field S.d.)·(Hole# –13). Weights apply influence to the 18th hole of the day twice that of 17th, three times that of the 16th, etc.
- 8
- 9
See Dorman (2010).
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©2013 by Walter de Gruyter Berlin Boston
