The Conversation:
Weightlifters and divers offer a lesson for business in risk and reward
2 November 2017
In practice, competitors often do not only choose their level of effort; they also have to decide between more or less risky strategies. For example, a pharmaceutical firm that is lagging behind in a patent race may start exploring more risky projects, and a money manager with below-market returns might start investing in riskier assets. So, colleagues and I looked at top-level weightlifting and diving competitions, including the Olympics, to examine athletes’ choices about effort and risk-taking in a tournament setting, with an eye on whether we could draw any lessons which applied to business.