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We empirically explore the relevance of risk taking behavior in tournaments. We make use of data from the NBA season 2007/2008 and measure risk taking by the fraction of three-point shots. Current heterogeneity of teams is taken into account by intermediate results. It turns out that indeed teams who are behind increase the risk in terms of more three-point attempts. We additionally analyze the consequences of this change in behavior. Enhanced risk taking is inefficient for the vast majority of cases and only beneficial in terms of a higher winning probability if a team is behind with a rather large amount of points. We discuss possible explanations for these decision errors.
Source: “Risk Taking Behavior in Tournaments: Evidence from the NBA” from IZA Discussion Paper No. 4812, March 2010
If you’re looking for some good books about sports check out Moneyball and Game of Shadows. Here’s a great book about a sports junkie. For great sports gambling stories, I recommend this book.
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