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Media attention and betting markets

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  • Legge, Stefan
  • Schmid, Lukas

Abstract

This paper investigates whether biased media attention affects perceptions about future events. We use data on World Cup tournaments in alpine skiing for the period of 1992–2014 and exploit close races as a source of randomness for ranking positions. Since the allocation of media attention is skewed towards the winner and athletes on the podium, we can estimate the causal effect of media attention. Our results document that ranking schemes generate sharp discontinuities in media attention even in close competitions. However, both regression discontinuity and instrumental variables estimates reveal that biased media attention neither affects prices nor quantities in the betting market. We conduct a series of robustness tests to explore the sensitivity of our results.

Suggested Citation

  • Legge, Stefan & Schmid, Lukas, 2016. "Media attention and betting markets," European Economic Review, Elsevier, vol. 87(C), pages 304-333.
    • Handle: RePEc:eee:eecrev:v:87:y:2016:i:c:p:304-333
    DOI: 10.1016/j.euroecorev.2016.06.001
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    Cited by:

    1. David Gill & Zdenka Kissová & Jaesun Lee & Victoria Prowse, 2019. "First-Place Loving and Last-Place Loathing: How Rank in the Distribution of Performance Affects Effort Provision," Management Science, INFORMS, vol. 65(2), pages 494-507, February.
    2. Marius Ötting & Christian Deutscher & Carl Singleton & Luca De Angelis, 2023. "Gambling on Momentum in Contests," Economics Discussion Papers em-dp2023-08, Department of Economics, University of Reading.
    3. Raja Kali & David Pastoriza & Jean‐François Plante, 2018. "The burden of glory: Competing for nonmonetary incentives in rank‐order tournaments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(1), pages 102-118, March.
    4. Vojtech Kotrba, 2023. "Testing “hot hand” hypothesis at the individual athletes' level in soccer," Economics Bulletin, AccessEcon, vol. 43(3), pages 1356-1365.

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    More about this item

    Keywords

    Betting; Media attention; Rankings;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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