Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment

Abstract

Much like cognitive abilities, emotional skills can have major effects on performance and economic outcomes. This paper studies the behavior of professional subjects involved in a dynamic competition in their own natural environment. The setting is a penalty shoot-out in soccer where two teams compete in a tournament framework taking turns in a sequence of five penalty kicks each. As the kicking order is determined by the random outcome of a coin flip, the treatment and control groups are determined via explicit randomization. Therefore, absent any psychological effects, both teams should have the same probability of winning regardless of the kicking order. Yet, we find a systematic first-kicker advantage. Using data on 2,731 penalty kicks from 262 shoot-outs for a three decade period, we find that teams kicking first win the penalty shoot-out 60.5% of the time. A dynamic panel data analysis shows that the psychological mechanism underlying this result arises from the asymmetry in the partial score. As most kicks are scored, kicking first typically means having the opportunity to lead in the partial score, whereas kicking second typically means lagging in the score and having the opportunity to, at most, get even. Having a worse prospect than the opponent hinders subjects' performance. Further, we also find that professionals are self-aware of their own psychological effects. When a recent change in regulations gives winners of the coin toss the chance to choose the kicking order, they rationally react to it by systematically choosing to kick first. A survey of professional players reveals that when asked to explain why they prefer to kick first, they precisely identify the psychological mechanism for which we find empirical support in the data: they want \to lead in the score in order to put pressure on the opponent."

At least since Hume (1739) and Smith (1759), psychological elements have been argued to be as much a part of human nature, and possibly as important for understanding human behavior, as the strict rationality considerations included in economic models that adhere to the rational man paradigm. Clearly then, any study of human behavior that omits these elements can yield results of unknown reliability.

Much as the rationality principle has successfully accommodated social attitudes, altruism, values and other elements (see, e.g., Becker (1976, 1996), Becker and Murphy (2000)), behavioral economics attempts to parsimoniously incorporate psychological motives not traditionally included in economic models. Theoretical models in this area firmly rely for empirical support on the observation of human decision making in laboratory environments. Laboratory experiments have the important advantage of providing a great deal of control over relevant margins. In these settings, observed behavior often deviates from the predictions of standard economic models. In fact, at least since the 1970s, a great deal of experimental evidence has been accumulated demonstrating circumstances under which strict rationality considerations break down and other patterns of behavior, including psychological considerations, emerge. Thus, an important issue is how applicable are the insights gained in laboratory settings for understanding behavior in natural environments. This challenge, often referred to as the problem of “generalizability” or “external validity,” has taken a central role in recent research in the area.¹

The best and perhaps only way to address this concern is by studying human behavior in real life settings. Unfortunately, however, Nature does not always create the circumstances that allow a clear view of the psychological principles at work. Furthermore, naturally occurring phenomena are typically too complex to be empirically tractable in a way that we can discern psychological elements from within the characteristically complex behavior exhibited by humans.²

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