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What can sport learn from behavioural finance? The field challenges the traditional assumption that individuals are rational and always make the optimum decision when confronted with choices. In fact, behavioural economics tells us that people are irrational and are driven by their emotions, which serves to undermine their decision-making. As in sport, sound decision-making is essential in the world of economics and behavioural finance seeks to provide practical solutions.
Our Lead Writer John Portch is joined by behavioural economist Dr Benjamin Kelly and Dr Clive Reeves, a strategy specialist who works across a range of elite sports, to discuss the most common biases that can afflict a sports team at coaching and front office level.
The main biases Dr Kelly identifies are:
He and Dr Reeves delve into each bias and explain why teams should prevent emotions hindering the big decisions.