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Favouritism and Financial Incentives: A Natural Experiment

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Author Info
Rickman, Neil
Witt, Robert

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Abstract

Principals who exercise favouritism towards certain agents may harm those who are not so favoured. Other papers have produced evidence consistent with the presence of such favouritism but have been unable to consider methods for controlling it. We address this issue in the context of a natural experiment from English soccer, where one particular league introduced professional referees in 2001-02, thereby changing the financial incentives and monitoring regime faced by these referees. Because the change was not effected in all leagues, the ‘experiment’ has both cross-sectional and intertemporal dimensions. We study the effects of professional referees on an established measure of referee bias: length of injury time in close matches. We find that referees exercised favouritism prior to professionalism but not afterwards, having controlled for selection and soccer-wide effects. The results are consistent with a financial incentive effect as a result of professional referees and indicate that subtle aspects of principal-agent relationships (such as favouritism) are amenable to contractual influence.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4968.

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Date of creation: Mar 2005
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Handle: RePEc:cpr:ceprdp:4968

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Related research
Keywords: favouritism; financial incentives; referee; soccer;

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Find related papers by JEL classification:
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gray, Alastair & Rickman, Neil & Fenn, Paul, 1999. "Professional Autonomy and the Cost of Legal Aid," Oxford Economic Papers, Oxford University Press, vol. 51(3), pages 545-58, July.
  2. Luis Garicano & Ignacio Palacios & Canice Prendergast, 2001. "Favoritism Under Social Pressure," NBER Working Papers 8376, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. John Knowles & Nicola Persico & Petra Todd, 2001. "Racial Bias in Motor Vehicle Searches: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 203-232, February. [Downloadable!] (restricted)
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  4. Zantman, Wilfried, 2002. " Constitutional Design and Regional Favoritism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(1), pages 71-93. [Downloadable!] (restricted)
  5. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March. [Downloadable!] (restricted)
  6. Matthias Sutter & Martin G. Kocher, . "Favoritism of agents – The case of referees’ home bias," Papers on Strategic Interaction 2002-28, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
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  7. Canice Prendergast & Robert H. Topel, 1993. "Favoritism in Organizations," NBER Working Papers 4427, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Naegelen, Florence & Mougeot, Michel, 1998. "Discriminatory public procurement policy and cost reduction incentives," Journal of Public Economics, Elsevier, vol. 67(3), pages 349-367, March. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Roberto Antonietti, 2008. "Il ruolo economico dell’arbitro di calcio: una rassegna della letteratura e alcune questioni aperte," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 4(3), pages 75-103, Dicembre. [Downloadable!]
  2. Donna Harris & Benedikt Herrmann & Andreas Kontoleon, 2009. "`Two's Company, Three's a Group' The impact of group identity and group size on in-group favouritism," Discussion Papers 2009-13, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham. [Downloadable!]
    Other versions:
  3. Babatunde Buraimo & David Forrest & Robert Simmons, 2007. "The Twelfth Man? Refereeing Bias in English and German Soccer," Working Papers 0707, International Association of Sports Economists. [Downloadable!]
  4. Peter Dawson & Stephen Dobson, 2008. "The Influence of Social Pressure and Nationality on Individual Decisions: Evidence from the Behaviour of Referees," Working Papers 0809, International Association of Sports Economists. [Downloadable!]
    Other versions:
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