Abstract
Match play tournaments in golf provide an ideal setting to test for loss aversion in a competitive environment. Our analysis focuses on the task of putting and examines whether the probability of success is influenced by a player’s standing relative to his opponent in both an intermediate (the current hole) and overall (the match) competition. As predicted by prospect theory, we find that performance increases when a player is in a losing position. Further, we find that the degree to which this bias affects performance depends on one’s relative ranking within the match, the proximity to the end of the match, and the level of uncertainty in one’s reference points. A final analysis explores the possible role of risk-taking in explaining our findings