nep-spo New Economics Papers
on Sports and Economics
Issue of 2017‒12‒11
five papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Loss Aversion, Upset Preference, and Sports Television Viewing Audience Size By Brad R. Humphreys; Levi Perez
  2. The Effects of Prior Shocks on Managerial Risk Taking: Evidence from Italian Professional Soccer By Alessandro Bucciol; Alessio Hu; Luca Zarri
  3. Professional Sports Events, Concerts, and Urban Place Based Policy: Evidence from the Staples Center By Yulia Chikish; Brad R. Humphreys; Crocker H. Liu; Adam Nowak
  4. An Overview of Sports Betting Regulation in the United States By Brad R. Humphreys
  5. Hint of a Universal Law for the Financial Gains of Competitive Sport Teams. The case of Tour de France cycle race By Marcel Ausloos

  1. By: Brad R. Humphreys (West Virginia University, Department of Economics); Levi Perez (University of Oviedo, Department of Economics)
    Abstract: A growing body of research examines the effect of loss aversion (LA) on consumers’ decisions to watch or attend sporting events. Much of this research focuses on live game attendance. In contrast to the predictions of uncertainty of outcome hypothesis (UOH), loss-averse consumers prefer watching either potential upsets, or dominant performances by strong favorites, to events with uncertain outcomes. We test for LA vs. UOH effects in television viewing audience data for free over-the-air broadcasts of 304 Spanish football matches from 2008/09 to 2015/16. This setting generates substantial variation home team win probabilities because of the presence of Real Madrid CF and FC Barcelona. The results support the importance of LA/upset preferences: audience size for matches when home teams are large underdogs and when heavily favored are larger than for matches with uncertain outcomes, even when controlling for observable and unobservable factors affecting the number of viewers.
    Keywords: loss aversion, upset preference, consumer decisions, television audience, football
    JEL: L82 L15
    Date: 2017–11
  2. By: Alessandro Bucciol (Department of Economics (University of Verona)); Alessio Hu (University of Verona); Luca Zarri (Department of Economics (University of Verona))
    Abstract: A growing empirical literature documents that managerial risk taking is linked to an individual’s history of relevant shocks. Using male soccer data on 32 teams and 2160 matches covering eight seasons of the Italian premier league (“Serie A”), we provide clean evidence that change in managerial risk taking – proxied by a team coach’s decision to alter the initial system of play in a match – significantly depends on having experienced wins or defeats in the recent past. In particular, we show that prior shocks matter, as change in risk taking strongly and positively depends on prior defeats. Single defeats and heavy defeats make the coaches more risk seeking (opting for more offensive systems of play). In contrast, passing through multiple defeats in a row and experiencing single wins are associated with more cautious risk-taking behavior. Changing risk taking, though, does not seem to pay off in terms of match outcomes. Finally, we interestingly document that in top teams managerial risk taking is not sensitive at all to prior shocks, regardless of their positive or negative direction.
    Keywords: Managerial Risk Taking, Prior Shocks, Field Data, Soccer
    JEL: D81 D91
    Date: 2017–11
  3. By: Yulia Chikish (West Virginia University, Department of Economics); Brad R. Humphreys (West Virginia University, Department of Economics); Crocker H. Liu (Cornell University School of Hotel Administration); Adam Nowak (West Virginia University, Department of Economics)
    Abstract: We analyze the relationship between sports events and concerts, important hospitality demand drivers and key components of many urban renewal projects, in the Staples Center in Los Angeles, an arena home to three pro teams, and nearby hotel performance, exploiting exogenous daily variation in the timing of games and concerts from 2002 to 2017. Results show a small positive impact on revenue per available room at hotels within one mile of the arena and an offsetting decrease at hotels located one to four miles away. Granting nearby hotels exemptions from Los Angeles hotel taxes reduces potential tourism-generated hotel tax revenue increases.
    Keywords: place based policy, hotel operating performance, professional sports
    JEL: H71
    Date: 2017–11
  4. By: Brad R. Humphreys (West Virginia University, Department of Economics)
    Abstract: The United States employs an ad hoc, unconventional method of regulating sports betting, banning it almost everywhere while granting a monopoly to firms in a single state, Nevada. This approach encourages illegal sports betting markets, ignores negative externalities, and generates welfare losses among the large population of responsible recreational gamblers. I review the current state of sports betting regulation in the U.S. and assess its economic viability in advance of the Supreme Court of the United States decision on the landmark Christie v. National Collegiate Athletic Association case.
    Keywords: sports betting, PASPA, UIEGA
    JEL: K23 L83
    Date: 2017–11
  5. By: Marcel Ausloos
    Abstract: This short note is intended as a "Letter to the Editor" Perspective in order that it serves as a contribution, in view of reaching the physics community caring about rare events and scaling laws and unexpected findings, on a domain of wide interest: sport and money. It is apparent from the data reported and discussed below that the scarcity of such data does not allow to recommend a complex elaboration of an agent based model, - at this time. In some sense, this also means that much data on sport activities is not necessarily given in terms of physics prone materials, but it could be, and would then attract much attention. Nevertheless the findings tie the data to well known scaling laws and physics processes. It is found that a simple scaling law describes the gains of teams in recent bicycle races, like the Tour de France. An analogous case, ranking teams in Formula 1 races, is shown in an Appendix
    Date: 2017–11

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