Learning and Psychological Effects from Peers in a Competitive Environment: Evidence from the PGA Tour

Abstract

Identifying the impact that an individual’s peers have on his or her own performance outcomes is difficult to do in practice. Examining data from professional golf tournaments provides a unique opportunity to produce such estimates in that players compete in a high stakes setting, completing tasks in a discrete order with a group of randomly assigned peers. In a previous study, Guryan, Kroft, and Notowidigdo (2009) focus on how the ability of one’s playing partner impacts one’s own score in each round, finding little to no evidence of peer effects. We make use of detailed shot-level data, and focus on how putts taken by peers on a given hole impact the outcomes for an individual. There are at least two potential effects experienced by observing the performance of a peer. One is that a player learns about the features of the green: slope, speed or other relevant factors. The second effect is that a player experiences a psychological impact by seeing another player succeed or fail on a given shot. We find that the learning effect from simply observing other players has a positive impact on a player’s success. We also find evidence that a player’s success is negatively related to how successful his peers have been to that point.