Reference‐Dependent Risk‐Taking in the NBA
Bibliographic Data
| ID | 12166255 |
|---|---|
| Authors | Daniel Mochon (0000-0002-1734-0808, A.B. Freeman School of Business Tulane University New Orleans Louisiana USA, corresponding author) |
| Year | 2024 |
| Volume | 37 |
| Issue | 4 |
| Publication date | 2024-08-26 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Behavioral Decision Making (JOURNAL) |
| Journal identifiers | ISSN: 0894-3257 • E-ISSN: 1099-0771 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1002/bdm.2407 |
| OpenAlex | W4401931553 |
| Language | EN |
| References cited | 43 |
This paper examines whether risk preferences in the NBA are reference‐dependent and attempts to identify the reference point. Using data from 10 NBA seasons (12,890 games), I find that teams are more likely to attempt a riskier three‐point shot (vs. a less risky two‐point shot) when below the reference point than above it, consistent with Prospect Theory. The results further show that teams are not influenced by a single fixed reference point, but instead, their choices depend on the score difference, most recent score change, and pregame expectations. Additionally, the weight given to the reference point changes over the course of the game. Teams show a breakeven effect, such that they are more likely to attempt a three‐point shot when doing so can tie the game. They also show behavior consistent with mental accounting, as the reference point carries more weight at the end of a quarter than at the beginning. These results provide further real‐world evidence for reference‐dependent risk preferences while highlighting the challenge of applying reference‐dependent models to real‐world settings
Econometrics · Economics · Geography · Microeconomics · Point (geometry · Prospect theory · Quarter (Canadian coin · Reference model · Statistics · Computer Science · Decision-Making and Behavioral Economics · Experimental Behavioral Economics Studies · Mathematics · Psychology · Sports Analytics and Performance
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Disappointment in Decision Making Under Uncertainty
A Theory of Disappointment Aversion
Adaptation-level as a basis for a quantitative theory of frames of reference.
Gambling with the House Money and Trying to Break Even
Choice Bracketing
Mental Accounting and Consumer Choice
Reference-Dependent Risk Attitudes
Reference Points and Effort Provision
Status quo bias in decision making
Prospect Theory
Social learning theory
Thirty Years of Prospect Theory in Economics
Are Longshots Only for Losers? A New Look at the Last Race Effect
Mental accounting matters
Interim performance information and risk taking in a tournament—Field evidence from professional basketball
Experimental Tests of the Endowment Effect and the Coase Theorem
| Citation velocity | historical |
|---|---|
| Highly cited | No |