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Do Fans Want Close Contests? A Test of the Uncertainty of Outcome Hypothesis in the National Basketball Association

Author

Listed:
  • Daniel A. Rascher

    () (University of San Francisco)

  • John Paul G. Solmes

    () (KPMG LLP)

Abstract

The National Basketball Association claims to sell entertainment. Part of that entertainment is close, competitive contests with uncertain outcomes. However, hometown fans want the home team to win. Hence, the optimal probability that the home team wins a game, from the perspective of maximizing demand, lays somewhere between 0.5 and 1.0. Using data from individual games for the 2001-02 season, this optimal probability was estimated to be approximately 0.66. Fans want their home team to have about twice the chance to win a game as the visiting team.

Suggested Citation

  • Daniel A. Rascher & John Paul G. Solmes, 2007. "Do Fans Want Close Contests? A Test of the Uncertainty of Outcome Hypothesis in the National Basketball Association," International Journal of Sport Finance, Fitness Information Technology, vol. 2(3), pages 130-141, August.
  • Handle: RePEc:jsf:intjsf:v:2:y:2007:i:3:p:130-141
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    References listed on IDEAS

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    1. Paul, Rodney J. & Weinbach, Andrew P., 2007. "The uncertainty of outcome and scoring effects on Nielsen ratings for Monday Night Football," Journal of Economics and Business, Elsevier, vol. 59(3), pages 199-211.
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    Cited by:

    1. repec:hal:journl:halshs-00971782 is not listed on IDEAS
    2. 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.
    3. Petr A. Parshakov & Kseniya O. Baydina, 2017. "Brands or Uncertainty? An Empirical Test of the Uncertainty of Outcome Hypothesis in Russian Football," HSE Working papers WP BRP 163/EC/2017, National Research University Higher School of Economics.
    4. Budzinski, Oliver & Feddersen, Arne, 2015. "Grundlagen der Sportnachfrage: Theorie und Empirie der Einflussfaktoren auf die Zuschauernachfrage," Ilmenau Economics Discussion Papers 94, Ilmenau University of Technology, Institute of Economics.
    5. repec:lan:wpaper:3575 is not listed on IDEAS
    6. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00971782, HAL.
    7. Scott Tainsky & Jie Xu & Brian Mills & Steven Salaga, 2016. "How Success and Uncertainty Compel Interest in Related Goods: Playoff Probability and Out-of-Market Television Viewership in the National Football League," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(1), pages 29-43, February.
    8. repec:lan:wpaper:3573 is not listed on IDEAS
    9. repec:lan:wpaper:3681 is not listed on IDEAS
    10. Brian Mills & Rodney Fort, 2014. "League-Level Attendance And Outcome Uncertainty In U.S. Pro Sports Leagues," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 205-218, January.
    11. Wladimir Andreff, 2016. "Chapter X: The Tour de France: a success story in spite of competitive imbalance and doping," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01279855, HAL.
    12. Coates, Dennis & Humphreys, Brad & Zhou, Li, 2012. "Outcome Uncertainty, Reference-Dependent Preferences and Live Game Attendance," Working Papers 2012-7, University of Alberta, Department of Economics.
    13. Buraimo, Babatunde & Simmons, Rob, 2009. "A tale of two audiences: Spectators, television viewers and outcome uncertainty in Spanish football," Journal of Economics and Business, Elsevier, vol. 61(4), pages 326-338, July.
    14. repec:lan:wpaper:3966 is not listed on IDEAS
    15. repec:rfa:afajnl:v:3:y:2017:i:2:p:49-60 is not listed on IDEAS

    More about this item

    Keywords

    uncertainty of outcome; basketball; linear regression; home court advantage; demand; attendance;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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