Decision Making and Underperformance in Competitive Environments: Evidence from the National Hockey League

Summary We find evidence of suboptimal decisions leading to underperformance in a policy experiment where two teams of professionals compete in a tournament (National Hockey League shootout) performing a task (penalty shot) sequentially. Before an exogenous policy change, home teams had to perform the task second in the sequence. After the policy change, home teams were given the choice to lead or to follow in the sequence. Home teams should move first only when this is optimal, and this should lead them to winning the tournament more often. We find that after given the choice, home teams most of the time choose to move first in the sequence, and this results in a lower winning frequency for them. Contrary to what economic theory would predict, we find that an expanded choice set can lead to worse outcomes for the agents.