PEER EFFECTS IN A COMPETITIVE ENVIRONMENT: EVIDENCE FROM THE PGA TOUR

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).