We study an observable risk-return tradeoff for which risk "preferences" are normatively prescribed by the desire to win the game. The choice is whether to shoot a 2-pointer or a 3-pointer in professional (NBA) basketball. When trailing, teams should get more risk-loving as they fall further...

Large and thus statistically powerful A/B tests are increasingly popular in business and policy to evaluate potential innovations. We study how to optimally use scarce experimental resources to screen innovations. To do so, we propose a new framework for optimal experimentation that we call the...