True Links: Precursory Lessons from Golf for Effective Financial Behaviour

Julie Therese Knutsen; Mirela Malin; Tracey West; Mark Brimble

doi:10.2478/fprj-2017-0001

.blurhash-client-img { display: none !important; }

True Links: Precursory Lessons from Golf for Effective Financial Behaviour

Financial Planning Research Journal

Volume 3 (2017): Issue 1 (December 2017)

By: Julie Therese Knutsen, Mirela Malin, Tracey West and Mark Brimble

Open Access

|Mar 2024

Abstract

This article presents the results from a preliminary study which finds there are three psychological errors common to golf and financial behaviour which are the cause of unfavourable outcomes, namely overoptimism, overconfidence and emotional judgements. To manage these errors, this study finds the same strategies used to improve golfing decisions could carry over into our understanding of effective financial behaviour. Further, linking the research of effective golf play with effective financial behaviour leverages upon a worldwide interest which we argue has the potential to provide a range of analogies and visual clues for financial education and financial planning.

References

Ashton, R. and Roberts, M. L. (2005) ‘Effects of dispositional motivation on knowledge and performance in accounting’, Working paper, Duke University.
Search in Google Scholar Back to article
Baker, J., Horton, S., and Pearce, W. (2005) ‘A longitudinal examination of performance decline in champion golfers’, High Ability Studies, 16:2, pp. 179-185.
Search in Google Scholar Back to article
Barber, B.M. and Odean, T. (2001) ‘Boys will be boys: gender, overconfidence, and common stock investment’, Quarterly Journal of Economics, 116:1, pp. 261-292.
Search in Google Scholar Back to article
Binsch, O., Oudejans, R. R. D., Bakker, F. C., and Savelsbergh, G. J. P. (2009) ‘Unwanted effects in aiming actions: the relationship between gaze behavior and performance in a golf putting task’, Psychology of Sport and Exercise, 10:6, pp. 628-635. Accessed on August 30th 2013 at doi:http://dx.doi.org/10.1016/j.psychsport.2009.05.005.
Open DOI Search in Google Scholar Back to article
Brown, K., Harlow, V. W., and Starks, L. (1996) ‘Of tournaments and temptations: an analysis of managerial incentives in the mutual fund industry’, Journal of Finance, 51, pp. 85-110.
Search in Google Scholar Back to article
Cohen, A. B., Tenenbaum, G., and English, R. W. (2006) ‘Emotions and golf performance: an IZOF-based applied sport psychology case study’, Behavior Modification, 30:3, pp. 259-280. Accessed on August 30th, 2013 at doi:10.1177/0145445503261174.
Open DOI Search in Google Scholar Back to article
Corbin, J. and Strauss, A. (1990) ‘Grounded theory research: procedures, canons and evaluative criteria’, Qualitative Sociology, 13:1, pp. 3 – 21.
Search in Google Scholar Back to article
Coval, J. and Thakor, A. (2005) ‘Financial intermediation as a beliefs-bridge between optimists and pessimists’, Journal of Financial Economics, 75, pp. 535–569.
Search in Google Scholar Back to article
Crust, L., and Keegan, R. (2010) ‘Mental toughness and attitudes to risk-taking’, Personality and Individual Differences, 49:3, pp. 164-168. Accessed on August 30th, 2013 at doi:http://dx.doi.org/10.1016/j.paid.2010.03.026.
Open DOI Search in Google Scholar Back to article
Daish, C.B. (1972) The Physics of Ball Games, The English University Press Ltd, Lincoln, United Kingdom.
Search in Google Scholar Back to article
Dunn, J. L. (2009) ‘Using learning preferences to improve coaching and athletic performance’, Journal of Physical Education, Recreation and Dance, 80:3, pp. 30-37.
Search in Google Scholar Back to article
Einhorn, H. J. (1980) ‘Overconfidence in judgment’, New Directions for Methodology of Social and Behavioral Science, 4, pp. 1-16.
Search in Google Scholar Back to article
Ericsson, A. K. (2001) The Path to Expert Golf Performance: Insights from the Masters on How to Improve Performance from Deliberate Practice (Optimising Performance in Golf), Brisbane: Australian Academic Press.
Search in Google Scholar Back to article
Fischhoff, B., Slovic, P. and Lichtenstein, S. (1977) ‘Knowing with certainty: the appropriateness of extreme confidence’, Journal of Experimental Psychology, 3, pp. 552-564.
Search in Google Scholar Back to article
Forsyth, P. (2003) Tiger Woods is no Risk-taking Maverick, but a Conservative, Safety-first Golfer, Scotland on Sunday, 08 June, p. 12.
Search in Google Scholar Back to article
Gilovich, T., Vallone, R. and Tversky, A. (1985) ‘The hot hand in basketball: On the misperception of random sequences’, Cognitive Psychology, 17, pp. 295-314.
Search in Google Scholar Back to article
Griffin, D. and Tversky, A. (1992) ‘The weighing of evidence and the determinants of overconfidence’, Cognitive Psychology, 24, pp. 411-435.
Search in Google Scholar Back to article
Guba, E.G. and Lincoln, Y.S., (1981) Effective evaluation: Improving the usefulness of evaluation results through responsive and naturalistic approaches, Jossey-Bass.
Search in Google Scholar Back to article
Hayslip, B., Jr., Raab, C. M., Baczewski, P. C., and Petrie, T. A. (2010a) ‘The development and validation of the golf self-efficacy scale’, Journal of Sport Behavior, 33:4, pp. 427-441.
Search in Google Scholar Back to article
Hayslip, B., Petrie, T. A., MacIntire, M. M., and Jones, G. M. (2010b) ‘The influences of skill level, anxiety, and psychological skills use on amateur golfers’ performances’, Journal of Applied Sport Psychology, 22:2, pp. 123-133. Accessed on August 29th, 2013 at doi:10.1080/10413200903554281.
Open DOI Search in Google Scholar Back to article
Heaton, J.B. (2002) ‘Managerial optimism and corporate finance’, Financial Management, 31, pp. 33–45.
Search in Google Scholar Back to article
Hellström, J. (2009) ‘Psychological hallmarks of skilled golfers’, Sports Medicine, 39:10, pp. 845-855. Accessed on August 30th, 2013 at doi:10.2165/11317760-000000000-00000.
Open DOI Search in Google Scholar Back to article
Hill, D. M., Hanton, S., Matthews, N., and Fleming, S. (2011) ‘Alleviation of choking under pressure in elite golf: an action research study’, The Sport Psychologist, 25:4, pp. 465-488.
Search in Google Scholar Back to article
Joo, S. and Grable, J.E. (2004) ‘An exploratory framework of the determinants of financial satisfaction’, Journal of Family and Economic Issues, 25:1, pp. 25 – 50.
Search in Google Scholar Back to article
Knutsen, J. and Cameron, R. (2012) ‘The financial coaching advice model: an exploration into how it satisfies expectations of quality advice’, Australasian Accounting Business and Finance Journal, 6:4, pp. 31 – 45.
Search in Google Scholar Back to article
Malmendier, U. and Tate, G. (2005) ‘CEO overconfidence and corporate investment’, The Journal of Finance, 60:6, pp. 2661–2700.
Search in Google Scholar Back to article
McCaffrey, N., and Orlick, T. (1989) ‘Mental Factors Related to Excellence Among Top Professional Golfers’, International Journal of Sport Psychology, 20, pp. 256-278.
Search in Google Scholar Back to article
Melton, M., and Zorn, T. S. (2000) ‘Risk Taking in Tournaments’, Managerial Finance, 26:7, pp. 52-62.
Search in Google Scholar Back to article
Montier, J. (2002) Behavioural Finance: Insights in Irrational Minds and Markets, John Wiley and Sons Ltd, Chichester.
Search in Google Scholar Back to article
Montier, J. (2007) Behavioural Investing: A Practitioners Guide to Applying Behavioural Finance, John Wiley and Sons Ltd, Chichester.
Search in Google Scholar Back to article
Nofsinger, J. R. (2001) The Psychology of Investing, Prentice Hall, New Jersey.
Search in Google Scholar Back to article
Pope, D. G., and Schweitzer, M. E. (2011) ‘Is Tiger Woods Loss Averse? Persistent Bias in the Face of Experience, Competition, and High Stakes’, The American Economic Review, 101:1, pp. 129-157. Accessed on August 29th, 2013 at doi:http://dx.doi.org/10.1257/aer.101.1.129.
Open DOI Search in Google Scholar Back to article
Presson, P. K. and Benassi, V. A. (1996) ‘Illusion of control: A meta-analytic review’, Journal of Social Behavior and Personality, 11, pp. 493-510.
Search in Google Scholar Back to article
Puri, M. and Robinson, D.T. (2007) ‘Optimism and economic choice’, Journal of Financial Economics, 86, pp. 71–99.
Search in Google Scholar Back to article
Rubenstein, L. (2010) ‘Taking Pride in Policing Themselves’, (05 July). The Globe and Mail.
Search in Google Scholar Back to article
Sharot, T. (2011) ‘The optimism bias’, Current Biology, 21:2, pp. R941–R945.
Search in Google Scholar Back to article
Shefrin, H. (2005) A Behavioral Approach to Asset Pricing Theory, Elsevier North-Holland, Amsterdam.
Search in Google Scholar Back to article
Shefrin, H. (2007) Behavioural Corporate Finance: Decisions That Create Value, McGraw-Hill Companies, New York.
Search in Google Scholar Back to article
Shiller, R. J. (2000) Irrational Exuberance, Princeton University Press.
Search in Google Scholar Back to article
Slovic, P., Finucane, M., Peters E. and MacGregor, D. G. (2002) ‘Rational actors or rational fools: implications of the affect heuristic for behavioral economics’, Journal of Socio-Economics, 31 pp. 329–342.
Search in Google Scholar Back to article
Vara, K. (2007) ‘The Magic of Golf’, Malaysian Business, 42.
Search in Google Scholar Back to article
Warner, J. (2008) ‘Investors Should Have Looked at Madoff’s Golf Scores’, (16 December), The Independent, p. 38.
Search in Google Scholar Back to article
Weinberg, R., Butt, J., and Culp, B. (2011) ‘Coaches’ views of mental toughness and how it is built’, International Journal of Sport and Exercise Psychology, 9:2, pp. 156-172.
Search in Google Scholar Back to article
Yates, J. F. (1990) Judgement and Decision Making, Prentice Hall, Englewood Cliffs, New Jersey.
Search in Google Scholar Back to article

Articles in this issue

DOI: https://doi.org/10.2478/fprj-2017-0001 | Journal eISSN: 2206-1355 | Journal ISSN: 2206-1347

Journal RSS Feed

Language: English

Page range: 12 - 25

Submitted on: Aug 5, 2016

Accepted on: Oct 31, 2016

Published on: Mar 18, 2024

Published by: Financial Advice Association of Australia

In partnership with: Paradigm Publishing Services

Publication frequency: 2 issues per year

Keywords:

Financial behaviour,

Golf performance,

Financial decision-making,

Financial planning,

Financial coaching

Related subjects:

Business and economics,

Political economics,

Economic theory, systems and structures,

Business management,

Business management, other,

Industries,

Banks, financial service provider, insurers

© 2024 Julie Therese Knutsen, Mirela Malin, Tracey West, Mark Brimble, published by Financial Advice Association of Australia
This work is licensed under the Creative Commons Attribution 4.0 License.

Volume 3 (2017): Issue 1 (December 2017)