In the World Cup, England were on a “winning streak” until encountering Belgium. Before the match, a debate raged across the nation about whether tactically it would be wiser to lose against Belgium, so not try very hard for victory, in order to gain a strategic advantage later in the tournament.
Finishing second in the group meant avoiding some tough teams, possibly such as Brazil, in the quarter finals.
The argument against this scheme invoked an emotional phenomenon referred to as “momentum”, which can powerfully affect performance.
The effect has been found in political campaigns, investment in stock markets, and sport. In any situation in life where there are tests of performance which follow in sequence, often quite quickly, momentum can be an issue.
Resolving the controversy around this and adopting the correct strategy might be crucial in determining who eventually lifts the World Cup Trophy. The contention is that success in sport is more likely to be followed by further success, so that stalling a string of wins, even for tactical reasons, is extremely dangerous psychologically, and could lead to more losses later.
So will we live to rue the day that England fielded a weaker team against Belgium?
The psychological momentum theory argues for continuing to win, even if this puts the team at a later strategic potential disadvantage further in the tournament.
The latest scientific research on this controversial issue in sport was recently published in the prestigious academic periodical, Journal of Economic Behavior & Organization. One particularly intriguing finding from this study was that psychological momentum appears to apply as a real and significant effect for male yet not for female athletes.
Authors Danny Cohen-Zada, Alex Krumer and Ze’ev Shtudiner argue that their findings of a profound gender difference in psychological momentum and winning streaks between men and women suggest a vital role for testosterone in explaining male sporting performance.
Their study, entitled “Psychological momentum and gender”, focused on a particular sporting situation in which momentum could be studied most precisely, which was bronze medal fights in professional judo.
Investigating all major international tournaments during the period between 2009 and 2013, the study found that men’s performance is significantly affected by psychological momentum, while women’s is not.
While testosterone is known to enhance performance in both men and women, it commonly increases following victory and decreases following loss only among men.
The researchers, based at Ben-Gurion and Ariel Universities in Israel and the Swiss Institute for Empirical Economic Research, found that in judo competitions, the male contender with the psychological momentum advantage has a winning probability of about 69 per cent, which is more than twice that of his opponent.
This investigation points out that post-competition testosterone increases are associated with increased aggression, more willingness to compete, and heightened motivation to win.
Yet men experience testosterone increases not only after winning in sports, but also after other types of success. That means that testosterone’s tendency to reinforce future success probably extends to other areas.
Since it has also been shown to be positively associated with increased risk-taking, there is the possibility that it may induce positive momentum effects in financial and other economic markets.
Several studies have now found a positive association among male traders between testosterone levels and higher profits in financial markets. The research also finds that increases in testosterone lead to greater optimism and risk-taking among men.
This hormone may have profound effects on the wider economy as it may sustain the upward momentum of a bull market.
The authors quote a recent study which found an inverse relationship between the magnitude of price bubbles and the proportion of female traders in that market. Some claim that women are less exposed to the effect of testosterone when it comes to financial risk-taking.
So, the authors contend, one of the possible explanations for the collapse of the notorious housing bubble in 2008 was that female traders’ representation in Wall Street was only 10 per cent.
By increasing the share of women among traders, it may be possible to better stabilise financial markets since women experience less dramatic shifts in testosterone levels, which can make them less prone to the momentum effect.
None of this tells us how the teams will fare in their match tonight, but understanding the impact of momentum – in sport and in life – could help make you a better trader, whether you’re betting on England or not.