Media Briefings

LIMITED HUMAN ATTENTION DRIVES RISKIER BEHAVIOUR: Evidence from World Cup alpine skiing

  • Published Date: May 2016

People typically focus on the left-most digit of a number and pay only partial attention to other digits – and in World Cup alpine ski events, this makes them liable to take far more risk. According to research by Reto Foellmi, Stefan Legge and Lukas Schmid, athletes with a time difference to the leader after the opening run of just below a tenth-of-a-second threshold are significantly more likely to crash in the second run.

Their study, which is published in the May 2016 issue of the Economic Journal, analyses data on 1,865 athletes in World Cup alpine skiing to explore the effects of a left-digit bias when analysing the time difference to the leader after the opening run on the riskiness of their strategy for the second run.

The result suggests that athletes consider distances such as nine hundredths of a second to be much smaller than ten hundredths. Hence they pursue a riskier strategy, which increases their probability of not finishing the race by up to 28%. Moreover, the variation in their race times in the second run increases by over 26%.

Both numbers reflect the increased risk-taking when athletes pay limited attention to right digits. The result does not change even if only older, more experienced athletes are examined or races with large prize money.

The authors believe that their findings are useful for the understanding of risk-taking behaviour in general: ‘We find that irrespective of an individual's genetics, experience or what’s at stake, the way of processing information shapes behaviour under uncertainty.’

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This study shows that limited attention affects the individual risk-taking behaviour of professional athletes. The authors document that athletes in the Alpine Ski World Cup suffer from a left-digit bias, an empirical regularity that people tend to focus on the left-most digit of a number and pay only partial attention to other digits.

In particular, athletes who are a seemingly smaller distance behind the current leader are 28% more likely not to finish the race. To estimate the effect, the authors compare athletes with almost identical time differences, such as nine and ten hundredths of a second. Their findings provide the first real-world evidence that limited attention not only affects consumer behaviour but also has consequences for individual risk-taking behaviour.

The study investigates the presence of a left-digit bias by using data on 1,865 athletes in World Cup alpine skiing over the period of 1992-2014. The empirical analysis exploits the fact that slalom and giant slalom races consist of two separate runs. After the opening run, athletes obtain information about their own time as well as their distance behind the current leader.

The researchers explore whether athletes exhibit a left-digit bias when processing this time difference to the leader. In particular, they test whether the use of heuristic thinking affects the way athletes choose their risk strategy for the second run.

In the presence of a left-digit bias, athletes misinterpret distances such as nine hundredths of a second to be significantly smaller than, for example, ten hundredths of a second. This behavioural bias in turn leads to the adoption of a riskier strategy because achieving the great success (winning the race) appears to be more likely if the gap to the current leader seems to be small.

In the empirical analysis, the researchers exploit the fact that the right digits in athletes' time distance to the leader are quasi-randomly allocated. In other words, whether an athlete trails the current leader by, for example, nine or ten hundredths of a second is beyond his or her control.

The results reveal that individuals with an opening run time difference behind the leader of just below a tenth-of-a-second threshold are significantly more likely to crash in the second run. Risky behaviour increases the probability of not finishing the race by up to 28%. Moreover, the variation of race times in the second run increases by about 26%. This result also reflects increased risk-taking.

As expected, the effect is present only among athletes who are classified close to the leader after the first run, thus having a plausible chance of winning the race. These results are consistent with the theoretical prediction that athletes receive a signal about their time distance to the leader and pay only limited attention to right digits.

In contrast with previous research, this behavioural bias does not disappear when restricting the sample to older, more experienced athletes. On the contrary, the adoption of risky behaviour is large and significant even among athletes aged 25 and older.

Furthermore, there is no evidence that the left-digit bias is smaller in races with particularly large prize money. The researchers argue that their results can be explained by the concept of ‘ego depletion’. The particularly high stakes in World Cup competitions cause athletes to exert extreme effort during the race, making them vulnerable to behavioural biases afterwards.

The findings have implications beyond alpine skiing because they help to understand the causes of individual risk-taking behaviour. Irrespective of an individual's genetics, experience or what is at stake, the way of processing information shapes behaviour under uncertainty. Hence, limited attention is likely to have important implications that are more far reaching than suggested by previous research.

ENDS


Notes for editors: ‘Do Professionals Get it Right? Limited Attention and Risk-taking Behaviour’ by Reto Foellmi, Stefan Legge and Lukas Schmid is published in the May 2016 issue of the Economic Journal.

The authors are at the University of St. Gallen.

For further information: contact Lukas Schmid on +41 788 982 273 (email: lukas.schmid@unisg.ch); or Romesh Vaitilingam on +44-7768-661095 (email: romesh@vaitilingam.com; Twitter: @econromesh).