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on Sports and Economics |
| By: | Krumer, Alex; Lechner, Michael |
| Abstract: | The home advantage phenomenon is a well-established feature in sports competitions. In this paper, we examine data from 1,908 soccer matches played in the German Bundesliga during the seasons from 2007-08 to 2015-16. Using a very rich data set, our econometric analysis that is based on matching methods reveals that the usual home advantage disappears when the game is in the middle of the week instead of being on the weekend. Our results indicate that, since the midweek matches are unevenly allocated among teams, the actual schedules of the Bundesliga favour teams with fewer home games in midweek. The paper also shows that these soccer-specific findings have some implications for the design of contests in general. |
| Keywords: | Performance, schedule effects, soccer |
| JEL: | D00 L00 D20 Z20 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2016:09&r=spo |
| By: | Angie ANDRIKOGIANNOPOULOU (University of Geneva and Swiss Finance Institute); Filippos PAPAKONSTANTINOU (Imperial College London) |
| Abstract: | We use a unique panel dataset of individual activity in a soccer wagering market, to study the extent to which individuals’ betting behavior is affected by biases such as the representativeness bias, the limited-attention bias, and the home/local bias. Sports betting markets provide a real-world empirical setting with many similarities with traditional financial markets but with experimental-like features. The study of this alternative market enables us to test whether the documented biases are stable across markets, and to better disentangle rational versus behavioral explanations of observed behavior through direct tests of market efficiency and portfolio performance. In addition, our long panel dataset renders an individual-level analysis of behavior possible, hence enables us to study the prevalence of these biases in the cross-section. We find that participants in the soccer wagering market adhere to the same heuristics as investors in the stock market, as patterns in team past performance, team popularity, and team location significantly affect individual bet selection and portfolio weighting decisions. Furthermore, we find that none of the sentiment variables contains information about match outcomes that is not reflected in the quoted prices, and that individuals do not earn significantly higher returns from betting on teams on long winning streaks, on popular teams, or on domestic/local teams. This evidence indicates that the observed behavior is not driven by superior information but rather by sentiment, and could provide useful insights about the sources of analogous biases in the stock market, where tests of efficiency and superior performance are not as clean. The individual-level analysis shows that the local bias is less evident across individuals relative to the other biases, and that while these biases affect most individuals’ bet selection decision, they are not prevalent across individuals in the portfolio weighting decision. OR from SSRN: We use novel data on individual activity in a sports betting market to study the effect of past performance sequences on individual behavior in a real market. The revelation of fundamental values in this market enables us to disentangle whether behavior is caused by sentiment or by superior information about market mispricings, hence to cleanly test in a real setting two sentiment-based theories of momentum and reversals — the regime-shifting model of Barberis, Shleifer, and Vishny (1998) and the gambler's/hot-hand fallacy model of Rabin (2002). Furthermore, our long panel allows us to calculate the proportions of individuals who exhibit each type of behavior. We find that i) three quarters of individuals exhibit trend-chasing behavior; ii) seven times as many individuals exhibit behavior consistent with Barberis, Shleifer, and Vishny (1998) as exhibit behavior consistent with Rabin (2002); and iii) no individuals earn superior returns from momentum trading. |
| Keywords: | Behavioral Biases, Market Efficiency, Investor Sentiment, Sports Betting, Gambling, Individuals or from SSRN: Momentum, Individual Decision-making, Heterogeneity, Behavioral Biases, Information |
| JEL: | D12 D81 G00 D12 D81 G02 G11 G14 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp1419&r=spo |
| By: | Krumer, Alex; Lechner, Michael |
| Abstract: | The order of actions in contests may have a significant effect on performance. In this study we examine the role of schedule in round-robin tournaments with sequential games between three and four contestants. Our propensity-score matching estimation, based on soccer FIFA World Cups, UEFA European Championships and Olympic wrestling events, reveals that there is a substantial advantage to the contestant who competes in the first and third matches, which is in line with game-theoretical predictions. Our finding implies that the round-robin structure with sequential games is endogenously unfair, since it systematically favours one of the contestants. |
| Keywords: | Performance, schedule effects, soccer |
| JEL: | D00 L00 D20 Z20 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2016:11&r=spo |
| By: | Nola Agha (Department of Sports Mangement, University of San Francisco); Thomas Rhoads (Department of Economics, Towson University) |
| Abstract: | Split season league design resets standings at the midpoint of the season thus allowing for two periods in which a team can potentially achieve success in a single season. This context allows us to test both the reputation of the first half winner and the league standing effect on demand. Examination of game-level data from the 2010 Southern League reveals fans are unaffected by measures of both team quality and league standing. On the other hand, the first half winners achieved attendance nearly 30% higher in the second half of the season suggesting that at this level of competition winning doesn’t matter but winners do. |
| Keywords: | Demand, minor league baseball, league standing effect, split season. |
| JEL: | L22 L83 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:tow:wpaper:2016-13&r=spo |
| By: | Vidal-Puga, Juan |
| Abstract: | We analyse the effect of taxation in the online sport betting market. This market is characterized by its negligible marginal costs. Taxation can be on volume (General Betting Duty) or on gross profit (Gross Profit Tax). We model the two most popular online sport betting bets: fixed-odds and spread, as compared with another traditional sport betting: parimutuel. |
| Keywords: | taxation; online betting market; sport betting; bookmaker |
| JEL: | C72 D42 L83 |
| Date: | 2016–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72596&r=spo |