IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp2275.html
   My bibliography  Save this paper

Seemingly Irrelevant Events Affect Economic Perceptions and Expectations: The FIFA World Cup 2006 as a Natural Experiment

Author

Listed:
  • Dohmen, Thomas

    () (University of Bonn and IZA)

  • Falk, Armin

    () (briq, University of Bonn)

  • Huffman, David B.

    () (University of Pittsburgh)

  • Sunde, Uwe

    () (University of Munich)

Abstract

Prominent economic theories have emphasized the role of commonly held perceptions and expectations for determining macroeconomic outcomes. A key empirical question is how such collectively held beliefs are formed. We use the FIFA World Cup 2006 as a natural experiment. We provide direct evidence that seemingly irrelevant events (the outcomes of soccer matches) can systematically affect individual perceptions about economic prospects, both on a personal and economy-wide level.

Suggested Citation

  • Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe, 2006. "Seemingly Irrelevant Events Affect Economic Perceptions and Expectations: The FIFA World Cup 2006 as a Natural Experiment," IZA Discussion Papers 2275, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2275
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp2275.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Matsusaka, John G & Sbordone, Argia M, 1995. "Consumer Confidence and Economic Fluctuations," Economic Inquiry, Western Economic Association International, vol. 33(2), pages 296-318, April.
    2. Morris, Stephen & Shin, Hyun Song, 1998. "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks," American Economic Review, American Economic Association, vol. 88(3), pages 587-597, June.
    3. Russell Cooper & Andrew John, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, Oxford University Press, vol. 103(3), pages 441-463.
    4. Woodford, Michael, 1990. "Learning to Believe in Sunspots," Econometrica, Econometric Society, vol. 58(2), pages 277-307, March.
    5. Cass, David & Shell, Karl, 1983. "Do Sunspots Matter?," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 193-227, April.
    6. Acemoglu, Daron & Scott, Andrew, 1994. "Consumer Confidence and Rational Expectations: Are Agents' Beliefs Consistent with the Theory?," Economic Journal, Royal Economic Society, vol. 104(422), pages 1-19, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dietmar Fehr & Frank Heinemann & Aniol Llorente-Saguer, 2011. "The Power of Sunspots: An Experimental Analysis," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_33, Max Planck Institute for Research on Collective Goods.
    2. repec:ove:journl:aid:11247 is not listed on IDEAS
    3. Tausch, Franziska & Zumbuehl, Maria, 2018. "Stability of risk attitudes and media coverage of economic news," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 295-310.
    4. Peter A. Groothuis & Kurt W. Rotthoff, 2016. "The Economic Impact and Civic Pride Effects of Sports Teams and Mega-Events: Do The Public and the Professionals Agree?," Economic Affairs, Wiley Blackwell, vol. 36(1), pages 21-32, February.
    5. Simon Planells Struse & Daniel Montolio, 2014. "The effect of football matches on crime patterns in Barcelona," ERSA conference papers ersa14p1606, European Regional Science Association.
    6. Wicker, Pamela & Prinz, Joachim & von Hanau, Tassilo, 2012. "Estimating the value of national sporting success," Sport Management Review, Elsevier, vol. 15(2), pages 200-210.
    7. Adrian R. Bell & Chris Brooks & David Matthews & Charles Sutcliffe, 2012. "Over the moon or sick as a parrot? The effects of football results on a club's share price," Applied Economics, Taylor & Francis Journals, vol. 44(26), pages 3435-3452, September.
    8. Roos, Michael W.M., 2008. "Predicting the macroeconomic effects of abstract and concrete events," European Journal of Political Economy, Elsevier, vol. 24(1), pages 192-201, March.
    9. Daniel Montolio & Simón Planells-Struse, 2015. "Measuring the negative externalities of a private leisure activity: hooligans and pickpockets around the stadium," Working Papers 2015/15, Institut d'Economia de Barcelona (IEB).
    10. Markus LANG & Alexander RATHKE & Marco RUNKEL, 2010. "The Economic Consequences Of Foreigner Rules In National Sports Leagues," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 47-64.
    11. Stan du Plessis & Wolfgang Maennig, 2007. "World Cup 2010: South African Economic Perspectives and Perspectives Policy Challenges Informed by the Experience of Germany 2006," Working Papers 004, Chair for Economic Policy, University of Hamburg.
    12. repec:zbw:rwirep:0501 is not listed on IDEAS

    More about this item

    Keywords

    expectation formation; sunspots; soccer world cup; macroeconomic outcomes; psychology;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D0 - Microeconomics - - General
    • E0 - Macroeconomics and Monetary Economics - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iza:izadps:dp2275. 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: (Mark Fallak). General contact details of provider: http://www.iza.org .

    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.