Do Professionals Get It Right? Limited Attention and Risk-Taking Behaviour

Does information processing affect individual risk-taking behaviour? This paper 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 reduces left-digit bias. JEL Classification: D03, D81, D83, L83