nep-spo New Economics Papers
on Sports and Economics
Issue of 2019‒09‒23
two papers chosen by
Humberto Barreto
DePauw University

  1. Does It Pay to Bet on Your Favourite to Win? Evidence on Experienced Utility from the 2018 FIFA World Cup Experiment By Kossuth, Lajos; Powdthavee, Nattavudh; Harris, Donna; Chater, Nick
  2. Identifying the value of teamwork: Application to professional tennis By Devereux, Kevin

  1. By: Kossuth, Lajos (Warwick Business School); Powdthavee, Nattavudh (University of Warwick); Harris, Donna (University of Oxford); Chater, Nick (Warwick Business School)
    Abstract: This paper examined whether people gained significant emotional benefits from not engaging in emotional hedging – betting against the occurrence of desired outcomes. Using the 2018 FIFA World Cup as the setting for a lab-in-the-field experiment, we found substantial reluctance among England supporters to bet against the success of the England football team in the tournament. This decision not to offset a potential loss through hedging did not pay off in people's happiness following an England win. It was, however, associated with a sharp decrease in people's happiness following an England loss. Post-match happiness is relatively more stable among those who chose to hedge or were randomly allocated to hedge. We conclude that people do not hedge enough partly because they tend to overestimate the expected diagnostic cost of betting against their social identity, while underestimate the negative emotional impact from betting on their favourite to win when they did not win.
    Keywords: hedging, happiness, social identity, wellbeing, world cup, experienced utility
    JEL: I31
    Date: 2019–09
  2. By: Devereux, Kevin
    Abstract: Do workers vary in their ability to work with others? I compare a given worker's productivity in solitary production to their value-added to team production to identify team skills: a worker's contribution to team production above and beyond that given by general skills. The identifying assumption is that workers use general skills in both production functions, but team skills only in team production. Professional men's tennis provides a useful setting to compare solo work (singles) to teamwork (doubles). I find that around 50% of variation in team output is explained by team skills. This is robust to a variety of specifications, including nonlinearities in player inputs. Players sort positively-assortatively along both skill dimensions, yielding indirect returns to skills of about half the magnitude of the direct returns.
    Keywords: skills,human capital,teamwork,sorting,non-partite matching,assortative matching
    JEL: C33 D31 J24 J31
    Date: 2018

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