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Journal of Quantitative Analysis in Sports

An official journal of the American Statistical Association

Editor-in-Chief: Mark Glickman PhD

SCImago Journal Rank (SJR) 2015: 0.288
Source Normalized Impact per Paper (SNIP) 2015: 0.358
Impact per Publication (IPP) 2015: 0.250

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Risk management with tournament incentives

1Associate Professor, Department of Economics, San Diego State University, San Diego, CA 92182-4485, USA

Corresponding author: Edmund M. Balsdon, Associate Professor, Department of Economics, San Diego State University, San Diego, CA 92182-4485, USA, Phone: +619 594 5492, e-mail:

Citation Information: Journal of Quantitative Analysis in Sports. Volume 9, Issue 4, Pages 301–317, ISSN (Online) 1559-0410, ISSN (Print) 2194-6388, DOI: 10.1515/jqas-2013-0036, September 2013

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The convex payoff structure in professional golf rewards scoring volatility, giving rise to player types who succeed in spite of higher average scoring. The same risk incentives should influence all players to adjust risk strategies at key moments in tournaments when payoffs either crystallize or become particularly convex. This paper develops a simple theoretical framework, then explores the empirical evidence for strategic risk adjustment by players over the 2003–2012 PGA Tour seasons. Findings suggest that players respond measurably on average to risk incentives around the cutline, but much less so (if at all) to leaderboard position on the closing holes of a tournament. Both the payoff to risk and the technical capacity of players to add or subtract risk are estimated. Analysis of individual players indicates that some elite players are more risk responsive. Bias (e.g., loss aversion) is discussed along with other possible explanations for the apparent lack of risk response over the closing holes of a tournament.

Keywords: PGA Tour; risk strategy; tournament incentives

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