PEER EFFECTS IN A COMPETITIVE ENVIRONMENT: EVIDENCE FROM THEPGATOUR

Abstract

This study uses putting on the PGA TOUR to examine peer effects in a competitive setting. The nature of play in golf, in which players complete tasks in a discrete order with a group of randomly assigned peers, provides a unique opportunity to observe these effects among individuals competing in a high‐stakes tournament. Players have the chance both to learn from their peers, as well as to be psychologically impacted by peer success or failure. We find that learning by observing peers has a positive impact on a player's performance, while peer outcomes are negatively correlated with a player's own performance. (JEL D03, D83, L83)

Rank and Performance in Dynamic Tournaments: Evidence From the PGA Tour

“… 2. See Balsdon (2013); Fearing, Acimovic, and Graves (2011); Hickman and Metz (2015); Hickman and Metz (2018); Pope and Schweitzer (2011); and Stone and Arkes (2016) as recent examples. …”

“… 10. We follow Hickman and Metz (2018) in implementing clustering at the hole level. However, a case could also be made that clustering at the athlete level as in Genakos and Pagliero (2012) may be appropriate.…”

Online Training of Salespeople: Impact, Heterogeneity, and Spillover Effects

“…However, with an increase in the number of peers taking training (increase in the breadth of training), the spillover effect is negative on Other products, with a null effect on Focus products. It is possible that when a greater number of peers take trainings, a salesperson may become demotivated and feel pressured, leading to reduced performance (Hickman and Metz 2018). In addition, there may be other competitive effects going on that negatively impact salesperson performance (e.g., the likelihood of sabotage may be higher with more competing salespeople).…”

“…Literature on the spillover effect is rich and spread across many domains such as advertising (Shi, Grewal, and Sridhar 2021), research and development (Bloom, Schankerman, and Van Reenen 2013), branding (Balachander and Ghose 2003), entrepreneurship (Aarstad, Haugland, and Greve 2010), product diffusion (Bollinger and Gillingham 2012), human capital (Battu, Belfield, and Sloane 2003; Mas and Moretti 2009; Moretti 2004; Rosenthal and Strange 2008), education and training (Atefi et al 2018), gambling (Park and Manchanda 2015), and weight loss (Uetake and Yang 2020). Summarizing the extant literature on peer effects, Hickman and Metz (2018) find two broad reasons for peer effects: learning and motivation. When a person watches someone else doing a task well, the person learns and may improve their own performance.…”

“…Peer effect could also be indirect when peers do not directly observe each other. This could happen through supervisor(s) sharing information about peers’ performance and either encouraging or pressuring them to perform better (Hickman and Metz 2018). Clearly, peer effects are complex and may manifest in different ways.…”