Consistency Or Heroics: Skewness, Performance, And Earnings on the PGA TOUR‪.‬

Introduction PGA TOUR professional golfers play in tournaments where the payment structure to the winners is decidedly nonlinear. This payment structure disproportionately rewards superlative performance and brings forth more effort as predicted in the tournament compensation model of Lazear and Rosen (1981) and statistically verified in a couple of papers by Ehrenberg and Bognanno (1990a, 1990b). It also brings about the possibility that some of the hallmarks of the game of golf, namely, consistency and steady play, will be eclipsed by one-time heroics or flash-in-the-pan, "hot hand" performances. (1)