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Outcome Uncertainty, Reference-Dependent Preferences and Live Game Attendance

We develop a consumer choice model of live attendance at a sporting event with reference-dependent preferences. The predictions of the model motivate the “uncertainty of outcome hypothesis” (UOH) as well as fan’s desire to see upsets and to simply see the home team win games, depending on the importance of the reference-dependent preferences and loss aversion. A critical review of previous empirical tests of the UOH reveals significant support for models with reference-dependent preferences, but less support for the UOH. New empirical evidence from Major League Baseball supports the loss aversion version of the model.

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Paper provided by University of Alberta, Department of Economics in its series Working Papers with number 2012-7.

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Length: 27 pages
Date of creation: 03 Apr 2012
Date of revision:
Handle: RePEc:ris:albaec:2012_007
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  18. Robert J. Lemke & Matthew Leonard & Kelebogile Tlhokwane, 2010. "Estimating Attendance at Major League Baseball Games for the 2007 Season," Journal of Sports Economics, The North American Association of Sports Economists, vol. 11(3), pages 316-348, June.
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  24. Elise M. Beckman & Wenqiang Cai & Rebecca M. Esrock & Robert J. Lemke, 2012. "Explaining Game-to-Game Ticket Sales for Major League Baseball Games Over Time," Journal of Sports Economics, The North American Association of Sports Economists, vol. 13(5), pages 536-553, October.
  25. Daniel, Rascher, 1999. "A Test of the Optimal Positive Production Network Externality in Major League Baseball," MPRA Paper 25832, University Library of Munich, Germany.
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  27. Peel, David A & Thomas, Dennis A, 1988. "Outcome Uncertainty and the Demand for Football: An Analysis of Match Attendances in the English Football League," Scottish Journal of Political Economy, Scottish Economic Society, vol. 35(3), pages 242-49, August.
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