IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v145y2018icp95-113.html
   My bibliography  Save this article

Sports sentiment and tipping behavior

Author

Listed:
  • Ge, Qi

Abstract

This paper utilizes a high frequency dataset on taxi rides in New York City to investigate how emotions due to sporting event outcomes affect passengers’ tipping behavior. I formulate and empirically test a reference-dependent preferences framework of tipping behavior. The results indicate that the tipping amounts are driven by deviations from expectations much more so than wins and losses, with the most salient effects found under unexpected close wins. However, there is no support for loss aversion. The findings suggest that loss averse behavior may be subdued in the presence of social norms while surprises can result in freedom on the upside of tipping.

Suggested Citation

  • Ge, Qi, 2018. "Sports sentiment and tipping behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 95-113.
  • Handle: RePEc:eee:jeborg:v:145:y:2018:i:c:p:95-113
    DOI: 10.1016/j.jebo.2017.10.016
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268117302986
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David Card & Gordon B. Dahl, 2011. "Family Violence and Football: The Effect of Unexpected Emotional Cues on Violent Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 126(1), pages 103-143.
    2. Daniel I. Rees & Kevin T. Schnepel, 2009. "College Football Games and Crime," Journal of Sports Economics, , vol. 10(1), pages 68-87, February.
    3. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, Oxford University Press, vol. 121(4), pages 1133-1165.
    4. Alex Edmans & Diego García & Øyvind Norli, 2007. "Sports Sentiment and Stock Returns," Journal of Finance, American Finance Association, vol. 62(4), pages 1967-1998, August.
    5. Azar Ofer H, 2008. "Strategic Behavior and Social Norms in Tipped Service Industries," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-18, March.
    6. Bizzozero, Paolo & Flepp, Raphael & Franck, Egon, 2016. "The importance of suspense and surprise in entertainment demand: Evidence from Wimbledon," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 47-63.
    7. Vincent P. Crawford & Juanjuan Meng, 2011. "New York City Cab Drivers' Labor Supply Revisited: Reference-Dependent Preferences with Rational-Expectations Targets for Hours and Income," American Economic Review, American Economic Association, vol. 101(5), pages 1912-1932, August.
    8. Dominic Cortis, 2015. "Expected Values And Variances In Bookmaker Payouts: A Theoretical Approach Towards Setting Limits On Odds," Journal of Prediction Markets, University of Buckingham Press, vol. 9(1), pages 1-14.
    9. Henry S. Farber, 2008. "Reference-Dependent Preferences and Labor Supply: The Case of New York City Taxi Drivers," American Economic Review, American Economic Association, vol. 98(3), pages 1069-1082, June.
    10. Ofer Azar, 2010. "Do people tip because of psychological or strategic motivations? An empirical analysis of restaurant tipping," Applied Economics, Taylor & Francis Journals, vol. 42(23), pages 3039-3044.
    11. Dennis Coates & Brad R. Humphreys & Li Zhou, 2014. "Reference-Dependent Preferences, Loss Aversion, And Live Game Attendance," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 959-973, July.
    12. Conlin, Michael & Lynn, Michael & O'Donoghue, Ted, 2003. "The norm of restaurant tipping," Journal of Economic Behavior & Organization, Elsevier, vol. 52(3), pages 297-321, November.
    13. Jeffrey Ely & Alexander Frankel & Emir Kamenica, 2015. "Suspense and Surprise," Journal of Political Economy, University of Chicago Press, vol. 123(1), pages 215-260.
    14. Ofer H. Azar & Yossi Tobol, 2008. "Tipping as a Strategic Investment in Service Quality: An Optimal-Control Analysis of Repeated Interactions in the Service Industry," Southern Economic Journal, Southern Economic Association, vol. 75(1), pages 246-260, July.
    15. Ruffle, Bradley J., 1999. "Gift giving with emotions," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 399-420, July.
    16. Brad R. Humphreys & Li Zhou, 2015. "The Louis–Schmelling Paradox and the League Standing Effect Reconsidered," Journal of Sports Economics, , vol. 16(8), pages 835-852, December.
    17. Lynn, Michael, 2015. "Explanations of service gratuities and tipping: Evidence from individual differences in tipping motivations and tendencies," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 55(C), pages 65-71.
    18. John Anderson & Orn Bodvarsson, 2005. "Do higher tipped minimum wages boost server pay?," Applied Economics Letters, Taylor & Francis Journals, vol. 12(7), pages 391-393.
    19. Bodvarsson, Orn B. & Gibson, William A., 1994. "Gratuities and customer appraisal of service: Evidence from Minesota restaurants," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 23(3), pages 287-302.
    20. Henry S. Farber, 2015. "Why you Can’t Find a Taxi in the Rain and Other Labor Supply Lessons from Cab Drivers," The Quarterly Journal of Economics, Oxford University Press, vol. 130(4), pages 1975-2026.
    21. John E. Anderson & Örn B. Bodvarsson, 2005. "Tax Evasion on Gratuities," Public Finance Review, , vol. 33(4), pages 466-487, July.
    22. Frank, Robert H, 1987. "If Homo Economicus Could Choose His Own Utility Function, Would He Want One with a Conscience?," American Economic Review, American Economic Association, vol. 77(4), pages 593-604, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Reference-dependent preferences; Tipping behavior; Social norms;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Z2 - Other Special Topics - - Sports Economics

    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:eee:jeborg:v:145:y:2018:i:c:p:95-113. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/jebo .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.