DO SOCCER ASSOCIATIONS REALLY SPEND ON A GOOD THING? EMPIRICAL EVIDENCE ON HETEROGENEITY IN THE CONSUMER RESPONSE TO MATCH UNCERTAINTY OF OUTCOME

The purpose of this study is to analyze whether previous results describing the effect of uncertainty of outcome on match attendance in team sports have been driven by heterogeneity in fan demand. We apply censored quantile regression methods and place particular emphasis on the relationship between match uncertainty and attendance demand, as previous results are highly ambiguous. This is more surprising, as each season association and league officials continue to spend millions on enhancing this uncertainty. We also control for season ticket holders, who are unlikely to be influenced by match specificities. Based on data from German soccer, our results indicate that fan demand shows heterogeneity across quantiles and that increasing match uncertainty of outcome exclusively benefits teams who already face strong attendance demand. ( JEL D12, C14, C24, L83)     

Uncertainty of outcome or strengths of teams: an economic analysis of attendance demand for international cricket

A significant body of theoretical literature has argued that popular interest in sporting contests between teams is heavily influenced by how difficult it is to predict the result ex-ante. Empirical research has, however, been unable to reach a consensus on the magnitude of uncertainty of outcome on demand. In this article, we seek to resolve this impasse by distinguishing between uncertainty of outcome in the short run and uncertainty of outcome in the long run. We also show that it is important to control for the independent effect of absolute team strength when testing the uncertainty of outcome hypothesis. Using data on over 380 Test cricket matches played in England, Australia and New Zealand since 1980, we find that short-run uncertainty of outcome has a significant impact on attendance demand and that absolute team strength has better explanatory power for attendance demand than does long-run uncertainty of outcome. Our results suggest some policy implications for the management and organization of international cricket.     

The influence of demand and supply side pressures on the quantity and quality of inventive activity

This article arguments the literature on the demand for professional team sports by estimating a demand function for attendance at home matches in the Malaysian Semi-Pro Football League (MSPFL) between 1989 and 1991. A single-equation demand (attendance) function based on a pooled cross-section and time-series panel data set of 399 games is estimated by ordinary least squares, a fixed effects dummy variable covariance model and an error components model. Our findings confirm the importance of market size and championship prospects for the home team (but not the visiting team), as well as divisional status and ‘star’ players. The first match of the season and derby matches also increased attendance.     

Game Outcome Uncertainty and Television Audience Demand: New Evidence from German Football

Despite its prominence in the economic literature, our knowledge regarding the role of game outcome uncertainty (GOU) in spectator decision‐making is fairly limited. Even worse, studies testing the uncertainty of outcome hypothesis (UOH) by exploring TV demand for European football have further intensified the original ambiguity. In this paper, we revisit the role of GOU in spectator decision‐making by testing the UOH with regard to two different sporting products: (1) domestic league and (2) knockout tournament games. Analyzing TV demand for almost 1,500 German football games, we find support for the UOH in league, though not in knockout tournament games.     

Competition format,championship uncertainty and stadium attendance in European football – a small league perspective

To increase the number of regular season games, small football leagues are often organized as quadruple round robin tournaments with teams playing each other four times. Theoretically, however, the more games played, the less uncertain is the championship race, reducing fan interest in the league. This article uses data from Austria and Switzerland to study the relationship between competition format, championship uncertainty and attendance demand empirically. Results suggest that a team still in contention to win the championship positively affects attendance, while it is not the specificity of the competition format that per se contributes to less championship uncertainty.     

Testing the uncertainty outcome hypothesis using data from second tier soccer in Ireland

This study estimates a demand relationship for second tier soccer in Ireland to test the uncertainty outcome hypothesis (UOH). Using data from three recent playing seasons, the UOH is found to be upheld. In addition, well-determined effects for fixture quality, recent team performance and travel distance between the competing teams’ stadia are also obtained.     

The Demand for Australian Rules Football*

Declining attendances at Australian Rules football games organized by the VFL recently have become the focus of much concern. An econometric analysis of the demand for football is presented, using annual average attendance data for the years 1950–86. It is found that increases in admission prices had a significant negative effect on demand, and increases in real income a positive impact. Amongst other variables of importance in explaining demand are lagged attendance and uncertainty of outcome. Elasticities of demand are calculated and it is shown how they might be used to predict attendance under different pricing scenarios.     

Regulation through a revenue contest

This paper proposes a mechanism for the regulation of duopolies a revenue contests among the firms. Under the mechanism, the firm with the lower revenue is to pay a penalty to the firm with the higher revenue proportional to the difference between their revenues. In a homogenous good Cournot duopoly with convex cost and demand functions, the mechanism implements the optimal outcome when the firms have symmetric costs. When one firm is more efficient, the mechanism leads to increased social surplus under a large set of parameters. We also consider extensions that involve cost uncertainty, repeated games and differentiated goods.     

The role of strategic uncertainty in games: An experimental study of cheap talk and contracts in the Nash demand game

We utilise results from a human-subjects experiment to examine the connection between strategic uncertainty and outcomes in games. Our basic game is a Nash demand game where one player has an outside option available. A “chat” treatment allows bargainers to send cheap-talk messages prior to playing the basic game, and in a “contracts” treatment, they can additionally propose and accept binding contracts. We propose that strategic uncertainty comprises at least two facets: “coordination-type”, which is lower in the chat game than in the basic game, and “rationality-type”, which is lower in the contracts game than in the chat game. We find that both types of strategic uncertainty impact bargaining outcomes: moving from the basic game to the chat game, and thence to contracts, improves several aspects of outcomes, such as higher efficiency, less opting out and less under-demanding. Other results include a treatment effect on the types of agreements that are reached.     

Is parity good? Externalities in professional sports

In professional sports there are externalities. If one team acquires too much talent then that may impact the quality of the competition negatively. This means that the league can improve social welfare by distorting the competitive equilibrium allocation. This idea has been used to explain that there should be parity among teams to improve social welfare. We develop a theoretical model based on Biner's (2009) empirical results to capture the effect of this externality on the revenue levels and wages when local fans care about winning only. Social Planner's Problem for stadium revenues implies that it is possible to increase the total revenue made in the league compared to competitive equilibrium levels by increasing big market teams' talent level, therefore less parity. In other words due to externalities competitive market allocation is too equal compared to SPP allocation. We show when local audience is mainly interested in seeing their local team dominating the visiting team and national audience only interested in watching a close game on TV, the only way in the model for it ever to be efficient to enforce parity is if we introduce a national TV market into the analysis. For the national TV market, parity is going to lead to a wider TV audience. The greater the weight on this revenue stream, the more likely it is a parity policy can increase league revenues.     

我省武术运动发展现状与对策思考

武术是中华民族的传统体育运动项目。我省的武术运动从20世纪初的强省,到八、九十年代的大省,到近10年来的弱省的发展过程说明,领导重视,领队的管理能力和教练执教能力,是影响发展的重要因素。今后我省武术运动发展要解放思想,开发赛事,扩大影响,加强专业队建设。     

Skating on thin ice: rule changes and team strategies in the NHL

Abstract.  In an effort to stimulate a more exciting and entertaining style of play, the National Hockey Association (NHL) changed the rewards associated with the results of overtime games. Under the new rules, teams tied at the end of regulation both receive a single point, regardless of the outcome in overtime. A team scoring in the sudden-death 5-minute overtime period would earn an additional point. Prior to the rule change in the 1999–2000 season, the team losing in overtime would receive no points while the winning team earned 2 points. This paper presents a theoretical model to explain the effect of the rule change on the strategy of play during both the overtime period and the regulation time game. The results suggest that under the new overtime, format equally powerful teams will play more offensively in overtime resulting in more games decided by a sudden-death goal. The results also suggest that while increasing the likelihood of attacking in overtime, the rule change would have a perverse effect on the style of play during regulation by causing them to play conservatively for the tie. Empirical data confirm the theoretical results. The paper also shows that increasing the rewards to a win in regulation time would prevent teams from playing defensively during regular time.     

Just looking for a good game: competitive balance in the Korean Professional Baseball League

Rottenberg’s uncertainty of outcome hypothesis is about preferences that can vary across fans and sports. We provide the first evidence of the empirical power of the hypothesis in the Korean Professional Baseball League (KPBL). In a panel data set, team-level aggregation over years shows that fans of this league attend in ways consistent with the hypothesis at the level of game uncertainty and consecutive season uncertainty, but only the first is statistically significant. KPBL fans appear to just be looking for a good game. This is consistent with the nearly complete concentration of post-season participation among a very few teams outside of the major population centre in Seoul and a lack of local team identification among KPBL fans. Our work adds to the diversity of league structures in the competitive balance literature since talent levels in KPBL are the result of parent company advertising choices rather than geographic identification. There are research questions and a policy implication.     

The Game is Not the Same: The Demand for Test Match Cricket in Australia

We estimate a cricket demand equation for test matches played in Australia. Consistent with previous studies of the demand for professional sport, demand is specified as a function of both economic factors (such as admission price, income and market size) and match specific factors (such as the uncertainty of outcome, weather conditions and the presence of star players). Our results suggest that match specific factors, rather than economic factors, influence attendance. We compare our results to those of previous studies for Australia and England which estimate the demand for cricket.     

Pareto optimality in coalition formation

A minimal requirement on allocative efficiency in the social sciences is Pareto optimality. In this paper, we identify a close structural connection between Pareto optimality and perfection that has various algorithmic consequences for coalition formation. Based on this insight, we formulate the Preference Refinement Algorithm (PRA) which computes an individually rational and Pareto optimal outcome in hedonic coalition formation games. Our approach also leads to various results for specific classes of hedonic games. In particular, we show that computing and verifying Pareto optimal partitions in general hedonic games, anonymous games, three-cyclic games, room-roommate games and B-hedonic games is intractable while both problems are tractable for roommate games, W-hedonic games, and house allocation with existing tenants.     

Family violence and football: the effect of unexpected emotional cues on violent behavior

We study the link between family violence and the emotional cues associated with wins and losses by professional football teams. We hypothesize that the risk of violence is affected by the “gain-loss” utility of game outcomes around a rationally expected reference point. Our empirical analysis uses police reports of violent incidents on Sundays during the professional football season. Controlling for the pregame point spread and the size of the local viewing audience, we find that upset losses (defeats when the home team was predicted to win by four or more points) lead to a 10% increase in the rate of at-home violence by men against their wives and girlfriends. In contrast, losses when the game was expected to be close have small and insignificant effects. Upset wins (victories when the home team was predicted to lose) also have little impact on violence, consistent with asymmetry in the gain-loss utility function. The rise in violence after an upset loss is concentrated in a narrow time window near the end of the game and is larger for more important games. We find no evidence for reference point updating based on the halftime score.     

Cheap talk with multiple audiences: An experimental analysis

We examine strategic information transmission in a controlled laboratory experiment of a cheap talk game with one sender and multiple receivers. We study the change in equilibrium behavior from the addition of another audience as well as from varying the degree of conflict between the senderʼs and receiversʼ preferences. We find that, as in cheap talk games with just one receiver, information transmission is higher in games with a separating equilibrium, than in games with only a babbling equilibrium. More interestingly, we find clear evidence that the addition of another audience alters the communication between the sender and the receiver in a way consistent with the theoretical predictions. There is evidence of the presence of agents that are systematically truthful as senders and trusting as receivers: deviations from the theoretical predictions, however, tend to disappear with experience, and learning is faster precisely in the games where deviations are more pronounced.     

Social connectedness improves co-ordination on individually costly,efficient outcomes

We study the impact of social ties on behavior in two types of asymmetric coordination games. Social ties are varied by making players interact with partners from different in-groups (fellow members of their own sports team, members of their sports club, students of their university). Subjective social ties are further measured by direct questionnaires. We find that smaller and more salient in-groups lead to significantly more group beneficial choices. The same effect is observed for players that report high values of their subjective social ties. We discuss the implication of these results for theories assuming that socially tied individuals follow some group beneficial reasoning.     

The impact of the 1981 and 1994-1995 strikes on Major League Baseball attendance: a time-series analysis

Protracted labour disputes in professional team sports have become increasingly common in the past 30 years. Although each of the four major professional team sports in the USA have experienced episodes of labour strife, Major League Baseball has the longest and most frequent experience with labour-management conflict. Fans and the media claim with each incident permanent harm is done to baseball's standing as the national pastime. The purpose of this paper is to ascertain whether such claims can be supported by the empirical evidence. Utilizing time-series analysis, aggregate attendance at professional baseball games is examined. The evidence presented suggests that although the most protracted periods of labour discord had short-term impacts on attendance, there is no empirical evidence that these exogenous shocks had any long-term effects.     

RISKY PRODUCTION WITH EX-ANTE PRICES UNDER MONOPOLY ANALYTICAL AND SIMULATION RESULTS

This paper concerns the case of a monopolist facing multiplicative uncertainty in demand. Karlin and Carr (1962), henceforth KC, show that, when price and production are both chosen ex ante , the uncertainty price exceeds the certainty price. They also give a sufficient condition under which the firm locates above the certainty demand curve, but they do not consider the effect on the output level. In this note we replicate the KC results and then go further. In the special case that the price elasticity of certainty demand is constant, and the probability distribution for the uncertainty parameter in the demand function is uniform, output is unambiguously lower under uncertainty, and KC's condition for the firm to locate above the certainty demand curve can be strengthened to one that is both necessary and sufficient. The robustness of these results is tested under less stringent assumptions on demand, abandoning symmetry for a lognormal distribution of the uncertainty parameter. Simulation confirms that the results hold up, and also determines the effects upon the firm's decisions of an increase in demand uncertainty.