nep-spo New Economics Papers
on Sports and Economics
Issue of 2012‒04‒17
two papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Outcome Uncertainty, Reference-Dependent Preferences and Live Game Attendance By Coates, Dennis; Humphreys, Brad; Zhou, Li

  1. By: Coates, Dennis (Dept of Economics, UMBC); Humphreys, Brad (University of Alberta, Department of Economics); Zhou, Li (University of Alberta, Department of Economics)
    Abstract: We develop a consumer choice model of live attendance at a sporting event with reference-dependent preferences. The predictions of the model motivate the “uncertainty of outcome hypothesis” (UOH) as well as fan’s desire to see upsets and to simply see the home team win games, depending on the importance of the reference-dependent preferences and loss aversion. A critical review of previous empirical tests of the UOH reveals significant support for models with reference-dependent preferences, but less support for the UOH. New empirical evidence from Major League Baseball supports the loss aversion version of the model.
    Keywords: uncertainty of outcome hypothesis; attendance demand; prospect theory
    JEL: D12 L83
    Date: 2012–04–03
  2. By: Stefano D'Addona (University of Roma Tre); Axel Kind (University of Basel)
    Abstract: We conduct an empirical analysis of a hand-collected sample of 2,376 turnovers of soccer managers in the four major English leagues in the seasons from 1949/50 to 2007/08. While the relation between the probability of a manager being fired and long-term performance remained remarkably stable, both the absolute frequency and the sensitivity of firing decisions on the outcome of recent matches steadily and significantly increased during the six decades covered by our sample. This is likely to reflect the increased level of competition in and economic importance of the English soccer leagues.
    Keywords: Managers’ Turnover; Firing Decision; Governance Mechanisms; Logit Models, Duration Models
    JEL: G30 M51
    Date: 2011

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