Risk Taking Behavior in Tournaments:Evidence from the NBA

We empirically explore the relevance of risk taking behavior in tournaments. We make use ofdata from the NBA season 2007/2008 and measure risk taking by the fraction of three-pointshots. Current heterogeneity of teams is taken into account by intermediate results. It turnsout 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 takingis inefficient for the vast majority of cases and only beneficial in terms of a higher winningprobability if a team is behind with a rather large amount of points. We discuss possibleexplanations for these decision errors.[...]