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Expectations as Reference Points: Field Evidence from Professional Soccer

Author

Listed:
  • Björn Bartling

    (Department of Economics, University of Zurich, 8006 Zurich, Switzerland)

  • Leif Brandes

    (Warwick Business School, University of Warwick, Coventry CV4 7AL, United Kingdom)

  • Daniel Schunk

    (Department of Economics, University of Mainz, 55099 Mainz, Germany)

Abstract

We show that professional soccer players and their coaches exhibit reference-dependent behavior during matches. Controlling for the state of the match and for unobserved heterogeneity, we show on a minute-by-minute basis that players breach the rules of the game, measured by the referee’s assignment of cards, significantly more often if their teams are behind the expected match outcome, measured by preplay betting odds of large professional bookmakers. We further show that coaches implement significantly more offensive substitutions if their teams are behind expectations. Both types of behaviors impair the expected ultimate match outcome of the team, which shows that our findings do not simply reflect fully rational responses to reference-dependent incentive schemes of favorite teams to falling behind. We derive these results in a data set that contains more than 8,200 matches from 12 seasons of the German Bundesliga and 12 seasons of the English Premier League. This paper was accepted by Uri Gneezy, behavioral economics.

Suggested Citation

  • Björn Bartling & Leif Brandes & Daniel Schunk, 2015. "Expectations as Reference Points: Field Evidence from Professional Soccer," Management Science, INFORMS, vol. 61(11), pages 2646-2661, November.
  • Handle: RePEc:inm:ormnsc:v:61:y:2015:i:11:p:2646-2661
    DOI: 10.1287/mnsc.2014.2048
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    More about this item

    Keywords

    reference points; expectations; field data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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