IDEAS home Printed from https://ideas.repec.org/p/cra/wpaper/2021-10.html
   My bibliography  Save this paper

Beauty and Preferences Formation Exemplified in the Sports Market

Author

Listed:
  • Hannah Josepha Rachel Altman
  • Morris Altman
  • Benno Torgler
  • Stephen Whyte

Abstract

Beauty has been used as a fast and frugal heuristic, and therefore an important determinant of choice, as highlighted in research by Hamermesh. In a world of asymmetric information, beauty represents a proxy for objective characteristics or an object of desire, according to an individual’s preferences. A correlate of beauty, sexiness, has been used in sports to choose trainers or even to select the athletes expected to perform best, with people paying a premium for this beauty or sexiness. We argue that beauty can be a good or bad heuristic depending on the objective relationship between beauty and what it proxies. When it is a bad heuristic, it generates sub‐optimal outcomes for sports organizations. We discuss the conditions under which the beauty or sexiness heuristic generates sub‐optimal outcomes, why rational agents choose such a heuristic, and the conditions under which bad heuristics are sustainable. We also discuss this heuristic and the beauty premium in the context of Becker’s economic theory of discrimination, wherein rational decision‐makers trade‐off material considerations for the utility gained by contracting beautiful and sexy individuals. The latter has implications for the economic sustainability of an organization.

Suggested Citation

  • Hannah Josepha Rachel Altman & Morris Altman & Benno Torgler & Stephen Whyte, 2021. "Beauty and Preferences Formation Exemplified in the Sports Market," CREMA Working Paper Series 2021-10, Center for Research in Economics, Management and the Arts (CREMA).
    • Handle: RePEc:cra:wpaper:2021-10
    as

    Download full text from publisher

    File URL: https://www.crema-research.ch/papers/2021-10.pdf
    File Function: Full Text
    Download Restriction: no
    File URL: https://www.crema-research.ch/abstracts/2021-10.htm
    File Function: Abstract
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gary S. Becker & Kevin M. Murphy, 1993. "A Simple Theory of Advertising as a Good or Bad," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(4), pages 941-964.
    2. Markus M. Mobius & Tanya S. Rosenblat, 2006. "Why Beauty Matters," American Economic Review, American Economic Association, vol. 96(1), pages 222-235, March.
    3. Herbert A. Simon, 1996. "The Sciences of the Artificial, 3rd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691914, December.
    4. Daniel S. Hamermesh, 2013. "Beauty Pays: Why Attractive People Are More Successful," Economics Books, Princeton University Press, edition 1, number 9516.
    5. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    6. repec:cup:judgdm:v:6:y:2011:i:1:p:100-121 is not listed on IDEAS
    7. Morris Altman, 1995. "Labor Market Discrimination, Pay Inequality, and Effort Variability: An Alternative to the Neoclassical Model," Eastern Economic Journal, Eastern Economic Association, vol. 21(2), pages 157-169, Spring.
    8. Li, Yaoqi & Zhang, Chun & Laroche, Michel, 2019. "Is beauty a premium? A study of the physical attractiveness effect in service encounters," Journal of Retailing and Consumer Services, Elsevier, vol. 50(C), pages 215-225.
    9. Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
    10. Simon, Herbert A, 1979. "Rational Decision Making in Business Organizations," American Economic Review, American Economic Association, vol. 69(4), pages 493-513, September.
    11. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    12. Mancur Olson, 1996. "Distinguished Lecture on Economics in Government: Big Bills Left on the Sidewalk: Why Some Nations Are Rich, and Others Poor," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 3-24, Spring.
    13. Rosenblat, Tanya, 2008. "The Beauty Premium: Physical Attractiveness and Gender in Dictator Games," Staff General Research Papers Archive 13001, Iowa State University, Department of Economics.
    14. Justin Tan & Mike W. Peng, 2003. "Organizational slack and firm performance during economic transitions: two studies from an emerging economy," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1249-1263, December.
    15. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(4), pages 543-569.
    16. Weilong Bi & Ho Fai Chan & Benno Torgler, 2020. "“Beauty” premium for social scientists but “unattractiveness” premium for natural scientists in the public speaking market," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-9, December.
    17. James G. March, 1978. "Bounded Rationality, Ambiguity, and the Engineering of Choice," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 587-608, Autumn.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Altman, Morris, 2014. "Insights from behavioral economics on how labor markets work," Working Paper Series 3466, Victoria University of Wellington, School of Economics and Finance.
    2. Hu, Maggie Rong & Li, Xiaoyang & Shi, Yang, 2019. "Adverse Selection and Credit Certificates: Evidence from a P2P Platform," ADBI Working Papers 942, Asian Development Bank Institute.
    3. Morris Altman, 2021. "Methodological challenges in Behavioural Economics: Towards a more holistic and empirically rooted economic science," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 5(S3), pages 19-33, October.
    4. Chan, Ho Fai & Ulrich, Fabian & Altman, Hannah & Schmidt, Sascha L. & Schreyer, Dominik & Torgler, Benno, 2022. "Beyond performance? The importance of subjective and objective physical appearance in award nominations and receptions in football," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 271-289.
    5. Maggie Rong Hu & Xiaoyang Li & Yang Shi, 2019. "Adverse Selection and Credit Certificates: Evidence from a P2P Platform," Working Papers id:13038, eSocialSciences.
    6. Teppo Felin & Todd R. Zenger, 2017. "The Theory-Based View: Economic Actors as Theorists," Strategy Science, INFORMS, vol. 2(4), pages 258-271, December.
    7. Rizzello Salvatore, 2002. "Mind and choice in economics," CESMEP Working Papers 200206, University of Turin.
    8. Michaël Lainé, 2014. "Vers une alternative au paradigme de la rationalité ? Victoires et déboires du programme spinoziste en économie," Post-Print hal-01335618, HAL.
    9. David Stadelmann & Benno Torgler, 2012. "Bounded Rationality and Voting Decisions Exploring a 160-Year Period," Working Papers 2012.70, Fondazione Eni Enrico Mattei.
    10. Carolin V. Zorell, 2020. "Nudges, Norms, or Just Contagion? A Theory on Influences on the Practice of (Non-)Sustainable Behavior," Sustainability, MDPI, vol. 12(24), pages 1-21, December.
    11. Helmut Dietl & Anil Özdemir & Andrew Rendall, 2018. "The Role of Physical Attractiveness in Tennis TV-Viewership," Working Papers 376, University of Zurich, Department of Business Administration (IBW).
    12. Clement A. Tisdell, 2017. "Bounded Rationality, Satisficing and the Evolution of Economic Thought," Economic Theory, Applications and Issues Working Papers 264873, University of Queensland, School of Economics.
    13. Feng, Lei & Zhang, Minghui & Li, Yixin & Jiang, Yan, 2020. "Satisfaction principle or efficiency principle? Decision-making behavior of peasant households in China’s rural land market," Land Use Policy, Elsevier, vol. 99(C).
    14. F. Knobloch & J. -F. Mercure, 2016. "The behavioural aspect of green technology investments: a general positive model in the context of heterogeneous agents," Papers 1603.06888, arXiv.org.
    15. von Rosenstiel, Dirk Peters & Heuermann, Daniel F. & Hüsig, Stefan, 2015. "Why has the introduction of natural gas vehicles failed in Germany?—Lessons on the role of market failure in markets for alternative fuel vehicles," Energy Policy, Elsevier, vol. 78(C), pages 91-101.
    16. Altman, Morris, 2014. "Insights from behavioral economics on how labor markets work," Working Paper Series 18843, Victoria University of Wellington, School of Economics and Finance.
    17. Ronald Schettkat, 2018. "The Behavioral Economics of John Maynard Keynes," Schumpeter Discussion Papers sdp18007, Universitätsbibliothek Wuppertal, University Library.
    18. Caroline C. Brock & Bradford L. Barham, 2013. "‘Milk is Milk’: Organic Dairy Adoption Decisions and Bounded Rationality," Sustainability, MDPI, vol. 5(12), pages 1-26, December.
    19. Daniele Schilirò, 2012. "Bounded Rationality And Perfect Rationality: Psychology Into Economics," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 3(2), pages 99-108.
    20. Sovacool, Benjamin K., 2015. "The political economy of pollution markets: Historical lessons for modern energy and climate planners," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 943-953.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cra:wpaper:2021-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anna-Lea Werlen (email available below). General contact details of provider: https://edirc.repec.org/data/cremach.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.