Even the best golfers — yes, you Tiger Woods – systematically miss the opportunity to score a “birdie” (when a golfer sinks a ball one stroke below par, or what is expected) out of fear of having a “bogey” (or taking one stroke more than par), according to a study by two University of Pennsylvania professors.

However, playing it safe has its own costs in golf and business, Devin Pope and Maurice Schweitzer, professors of economics and psychology at the Wharton School, said in their paper entitled “Is Tiger Woods Loss Averse? Persistent Bias in the Face of Experience, Competition, and High Stakes.”

The professors studied putts during pro golf tournaments and their research suggested the “agony of a bogey seems to outweigh the thrill of a birdie.” They calculated that type of decision-making bias costs the average golfer about 1 stroke during a 72-hole tournament, translating to a combined loss of about $1.2 million in prize money per year for the top 20 golfers.

“This research provides evidence that people work especially hard in order to avoid losses,” Pope said.

The researchers found that golfers avoid the possibility of loss by playing conservatively when they could do better than par, but will try harder if they are at risk of coming in above par. Pope said “loss aversion” is part of a growing field of behavioral economics, which explores how human psychology impacts markets and business.

In a business context, the professors said par might be equated to quarterly earnings or investors’ approach to selling or holding on to stocks depending on what they initially paid for the shares.

The professors said their work challenges theories that suggest bias in decision making does not persist in markets. They used data from 230 PGA Tour golf tournaments between 2004 and 2009, concentrating on 2.5 million putts attempted by 412 golfers who each made at least 1,000 putts.

Pope, who does not golf, and Schweitzer, who only occasionally plays, said the study shows even experts in a subject suffer from bias in high-stakes settings.

“The bottom line is this,” said Schweitzer, “If Tiger Woods is biased when he plays golf, what hope do the rest of us have?”

(Reuters photo by Mick Tsikas)