An Empirical Study on Risk Taking in Tournaments

Individuals faced by a tournament can oftentimes not only choose their effort level, but also the risk level of their strategy. There are some theoretical contributions on risk taking in tournaments, which mainly point out disadvantages with respect to exerted effort. Empirical evidence is rare. In this paper we analyze risk taking behavior of professional soccer coaches. We find that risk taking concerning the kind of observed substitutions is, indeed, relevant. However, risk taking does not pay off. ∗ Financial support by the Deutsche Forschungsgemeinschaft (DFG), SFB-TR 15 (Governance and the efficiency of economic systems), is gratefully acknowledged. ∗∗ Christian Grund, Department of Economics, BWL 2, University of Bonn, Adenauerallee 24-42, D53113 Bonn, Germany. Tel.:+49-228-739213, Fax:+49-228-739210; E-mail:[email protected] ∗∗∗ Oliver Gürtler, Department of Economics, BWL 2, University of Bonn, Adenauerallee 24-42, D-53113 Bonn, Germany. Tel.:+49-228-739214, Fax:+49-228-739210; E-mail:[email protected]