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Favouritism and financial incentives: A natural experiment

Author Info

  • Robert Witt

    (University of Surrey)

  • Neil Rickman

    (University of Surrey)

Abstract

Principals who exercise favouritism towards certain agents may harm those who are not so favoured. Other papers have produced evidence consistent with the presence of such favouritism but have been unable to consider methods for controlling it. We address this issue in the context of a natural experiment from English soccer, where one particular league introduced professional referees in 2001-02, thereby changing the financial incentives and monitoring regime faced by these referees. Because the change was not effected in all leagues, the ‘experiment’ has both cross-sectional and intertemporal dimensions. We study the effects of professional referees on an established measure of referee bias: length of injury time in close matches. We find that referees exercised favouritism prior to professionalism but not afterwards, having controlled for selection and soccer-wide effects. The results are consistent with a financial incentive effect as a result of professional referees and indicate that subtle aspects of principal-agent relationships (such as favouritism) are amenable to contractual influence.

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File URL: http://www.fahs.surrey.ac.uk/economics/discussion_papers/2005/DP01-05.pdf
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Paper provided by School of Economics, University of Surrey in its series School of Economics Discussion Papers with number 0105.

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Length: 23 pages
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:sur:surrec:0105
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Keywords: Favouritism; financial incentives; soccer; referee;

Other versions of this item:

Find related papers by JEL classification:
  • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
  • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
  • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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  1. Matthias Sutter & Martin G. Kocher, . "Favoritism of agents – The case of referees’ home bias," Papers on Strategic Interaction 2002-28, Max Planck Institute of Economics, Strategic Interaction Group.
  2. Naegelen, Florence & Mougeot, Michel, 1998. "Discriminatory public procurement policy and cost reduction incentives," Journal of Public Economics, Elsevier, vol. 67(3), pages 349-367, March.
  3. John Knowles & Nicola Persico & Petra Todd, 2001. "Racial Bias in Motor Vehicle Searches: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 203-232, February.
  4. Zantman, Wilfried, 2002. " Constitutional Design and Regional Favoritism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(1), pages 71-93.
  5. Gray, Alastair & Rickman, Neil & Fenn, Paul, 1999. "Professional Autonomy and the Cost of Legal Aid," Oxford Economic Papers, Oxford University Press, vol. 51(3), pages 545-58, July.
  6. Luis Garicano & Ignacio Palacios & Canice Prendergast, 2001. "Favoritism Under Social Pressure," NBER Working Papers 8376, National Bureau of Economic Research, Inc.
  7. Canice Prendergast & Robert H. Topel, 1993. "Favoritism in Organizations," NBER Working Papers 4427, National Bureau of Economic Research, Inc.
  8. M. Grubb, 2003. "Editorial," Climate Policy, Taylor & Francis Journals, vol. 3(3), pages 189-190, September.
  9. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
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Cited by:

  1. Juan Mendoza & Andrés Rosas, 2013. "Referee Bias in Professional Soccer: Evidence from Colombia," VNIVERSITAS ECONÓMICA 011059, UNIVERSIDAD JAVERIANA - BOGOTÁ.
  2. Dey, Oindrila & Banerjee, Swapnendu, 2013. "Status, incentives and random favouritism," MPRA Paper 49188, University Library of Munich, Germany.
  3. repec:lan:wpaper:3946 is not listed on IDEAS
  4. Dawson, Peter & Dobson, Stephen, 2010. "The influence of social pressure and nationality on individual decisions: Evidence from the behaviour of referees," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 181-191, April.
  5. Roberto Antonietti, 2008. "Il ruolo economico dell’arbitro di calcio: una rassegna della letteratura e alcune questioni aperte," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 4(3), pages 75-103, Dicembre.
  6. Dey, Oindrila & Banerjee, Swapnendu, 2015. "Endogenous favouritism with status incentives: A model of optimum inefficiency," MPRA Paper 62828, University Library of Munich, Germany.
  7. repec:lan:wpaper:3661 is not listed on IDEAS
  8. Alex Bryson & Babatunde Buraimo & Rob Simmons, 2010. "Do Salaries Improve Worker Performance?," CEP Discussion Papers dp1019, Centre for Economic Performance, LSE.
  9. Francesc Trillas Jané, 2016. "Behavioral Regulatory Agencies," Working Papers wpdea1606, Department of Applied Economics at Universitat Autonoma of Barcelona.
  10. Donna Harris & Benedikt Herrmann & Andreas Kontoleon, 2009. "Two's Company, Three's a Group: The impact of group identity and group size on in-group favouritism," Environmental Economy and Policy Research Working Papers 41.2009, University of Cambridge, Department of Land Economics, revised 2009.
  11. Barry Reilly & Robert Witt, 2016. "Disciplinary Sanction and Social Pressure in English Premiership Soccer," Working Paper Series 8816, Department of Economics, University of Sussex.
  12. Katherine G. Yewell & Steven B. Caudill & Franklin G. Mixon, Jr., 2014. "Referee Bias and Stoppage Time in Major League Soccer: A Partially Adaptive Approach," Econometrics, MDPI, Open Access Journal, vol. 2(1), pages 1, February.
  13. Andrés J. Picazo-Tadeo & Francisco González-Gómez & Jorge Guardiola, 2011. "The importance of time in referee home bias due to social pressure. Evidence from Spanish football," FEG Working Paper Series 03/11, Faculty of Economics and Business (University of Granada).
  14. Dohmen, Thomas & Sauermann, Jan, 2015. "Referee Bias," IZA Discussion Papers 8857, Institute for the Study of Labor (IZA).
  15. Babatunde Buraimo & David Forrest & Robert Simmons, 2007. "The Twelfth Man? Refereeing Bias in English and German Soccer," Working Papers 0707, International Association of Sports Economists;North American Association of Sports Economists.
  16. Reilly, Barry & Witt, Robert, 2011. "Disciplinary sanctions in English Premiership Football: Is there a racial dimension?," Labour Economics, Elsevier, vol. 18(3), pages 360-370, June.
  17. Andrés Picazo-Tadeo & Francisco Gónzalez-Gómez & Jorge Guardiola Wanden-Berghe, 2011. "Referee home bias due to social pressure. Evidence from Spanish football," Working Papers 1119, Department of Applied Economics II, Universidad de Valencia.

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