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Expectations as Reference Points: Field Evidence from Professional Soccer

Author

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  • 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
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    File URL: http://dx.doi.org/10.1287/mnsc.2014.2048
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    References listed on IDEAS

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    Cited by:

    1. Ahrens, Steffen & Pirschel, Inske & Snower, Dennis J., 2017. "A theory of price adjustment under loss aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 78-95.
    2. repec:kap:theord:v:84:y:2018:i:3:d:10.1007_s11238-017-9621-0 is not listed on IDEAS
    3. repec:ebl:ecbull:eb-16-00850 is not listed on IDEAS
    4. Besters, Lucas, 2018. "Economics of professional football," Other publications TiSEM d9e6b9b7-a17b-4665-9cca-1, Tilburg University, School of Economics and Management.
    5. Brandes, Leif & Brechot, Marc & Franck, Egon, 2015. "Managers’ external social ties at work: Blessing or curse for the firm?," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 203-216.
    6. Alessandro Bucciol & Alessio Hu & Luca Zarri, 2017. "The Effects of Prior Shocks on Managerial Risk Taking: Evidence from Italian Professional Soccer," Working Papers 17/2017, University of Verona, Department of Economics.
    7. Courty, Pascal & Nasiry, Javad, 2015. "Loss Aversion and the Uniform Pricing Puzzle for Vertically Differentiated Products," CEPR Discussion Papers 10523, C.E.P.R. Discussion Papers.
    8. Dan Anderberg & Claudia Cerrone, 2017. "Investment in education under disappointment aversion," Economics Bulletin, AccessEcon, vol. 37(3), pages 1533-1540.
    9. repec:kap:jrisku:v:56:y:2018:i:1:d:10.1007_s11166-018-9271-9 is not listed on IDEAS
    10. Glimcher, Paul W. & Tymula, Agnieszka A., 2016. "Expected Subjective Value Theory (ESVT): A Representation of Decision Under Risk and Certainty," Working Papers 2016-08, University of Sydney, School of Economics, revised Jan 2017.
    11. Simon Haenni, 2016. "Do Setbacks Delay the Participation in Repeated Competitions? Evidence from a Natural Experiment with Amateur Tennis Players," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 16.13, Université de Lausanne, Faculté des HEC, DEEP.

    More about this item

    Keywords

    reference points; expectations; field data;

    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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