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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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    Cited by:

    1. Sung, Hojun & Mills, Brian M., 2018. "Estimation of game-level attendance in major league soccer: Outcome uncertainty and absolute quality considerations," Sport Management Review, Elsevier, vol. 21(5), pages 519-532.
    2. Misael Martinez & Jonathan Willner, 2017. "Competitive Balance and Consumer Demand in the English Football League," Applied Finance and Accounting, Redfame publishing, vol. 3(2), pages 49-60, August.
    3. Stefan Szymanski & Jason Winfree, 2018. "On The Optimal Realignment Of A Contest: The Case Of College Football," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 483-496, January.
    4. 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.
    5. repec:lan:wpaper:3575 is not listed on IDEAS
    6. Sang Hun Sung & Doo-Seung Hong & Soo Young Sul, 2020. "How We Can Enhance Spectator Attendance for the Sustainable Development of Sport in the Era of Uncertainty: A Re-Examination of Competitive Balance," Sustainability, MDPI, Open Access Journal, vol. 12(17), pages 1-15, August.
    7. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Post-Print halshs-00971782, HAL.
    8. 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.
    9. Ira Horowitz, 2018. "Competitive Balance in the NBA Playoffs," The American Economist, Sage Publications, vol. 63(2), pages 215-227, October.
    10. Stefan Szymanski, 2021. "On the Incidence of an Ad Valorem Tax: The Adoption of VAT in the UK and Cost Pass Through by English Football Clubs," De Economist, Springer, vol. 169(1), pages 37-61, February.
    11. 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.
    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. 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.
    14. 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.
    15. 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.
    16. Scott Tainsky & Jie Xu & Brian M. 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.
    17. Jigyu Chung & Young Hoon Lee & Joon-Ho Kang, 2016. "Ex Ante and Ex Post Expectations of Outcome Uncertainty and Baseball Television Viewership," Journal of Sports Economics, , vol. 17(8), pages 790-812, December.
    18. repec:lan:wpaper:3573 is not listed on IDEAS
    19. Wladimir Andreff, 2016. "Chapter X: The Tour de France: a success story in spite of competitive imbalance and doping," Post-Print halshs-01279855, HAL.
    20. repec:lan:wpaper:3681 is not listed on IDEAS
    21. 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.
    22. Franziska Prockl & Dirk Semmelroth, 2018. "Perception Versus Reality - Competitive Balance In Major League Soccer From 1996 – 2016," Working Papers Dissertations 36, Paderborn University, Faculty of Business Administration and Economics.
    23. repec:lan:wpaper:3966 is not listed on IDEAS
    24. 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.

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    More about this item

    Keywords

    uncertainty of outcome; basketball; linear regression; home court advantage; demand; attendance;
    All these keywords.

    JEL classification:

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

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