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Loss aversion, upset preference, and sports television viewing audience size

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  • Humphreys, Brad R
  • Pérez, Levi

Abstract

A growing body of research examines the effect of loss aversion (LA) on consumers' decisions to watch or attend sporting events. Much of this research focuses on live game attendance. In contrast to the predictions of uncertainty of outcome hypothesis (UOH), loss-averse consumers prefer watching either potential upsets, or dominant performances by strong favorites, to events with uncertain outcomes. We test for LA vs. UOH effects in television viewing audience data for free over-the-air broadcasts of 304 Spanish football matches from 2008/09 to 2015/16. This setting generates substantial variation home team win probabilities because of the presence of two dominant teams (Real Madrid CF and FC Barcelona). The results support the importance of LA/upset preferences: audience size for matches when home teams are large underdogs and when heavily favored are larger than for matches with uncertain outcomes, even when controlling for observable and unobservable factors affecting the number of viewers.

Suggested Citation

  • Humphreys, Brad R & Pérez, Levi, 2019. "Loss aversion, upset preference, and sports television viewing audience size," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 61-67.
    • Handle: RePEc:eee:soceco:v:78:y:2019:i:c:p:61-67
    DOI: 10.1016/j.socec.2018.12.002
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    1. Salaga, Steven & Tainsky, Scott, 2015. "Betting lines and college football television ratings," Economics Letters, Elsevier, vol. 132(C), pages 112-116.
    2. Dennis Coates & Brad R. Humphreys & Li Zhou, 2014. "Reference-Dependent Preferences, Loss Aversion, And Live Game Attendance," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 959-973, July.
    3. Buraimo, Babatunde & Simmons, Rob, 2009. "A tale of two audiences: Spectators, television viewers and outcome uncertainty in Spanish football," Journal of Economics and Business, Elsevier, vol. 61(4), pages 326-338, July.
    4. Evan Osborne, 2012. "Upsets," Journal of Sports Economics, , vol. 13(3), pages 314-320, June.
    5. Jigyu Chung & Young Hoon Lee & Joon-Ho Kang, 2016. "Ex Ante and Ex Post Expectations of Outcome Uncertainty and Baseball Television Viewership," Journal of Sports Economics, , vol. 17(8), pages 790-812, December.
    6. Brad R. Humphreys & Li Zhou, 2015. "The Louis–Schmelling Paradox and the League Standing Effect Reconsidered," Journal of Sports Economics, , vol. 16(8), pages 835-852, December.
    7. Adam Cox, 2018. "Spectator Demand, Uncertainty of Results, and Public Interest," Journal of Sports Economics, , vol. 19(1), pages 3-30, January.
    8. Levi Pérez & Víctor Puente & Plácido Rodríguez, 2015. "Are Broadcast Sporting Events of "General Interest"? A Regional Panel Data Analysis of TV Ratings for Spain's La Liga," Journal of Media Economics, Taylor & Francis Journals, vol. 28(1), pages 7-19, March.
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    Cited by:

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    4. Kunz-Kaltenhäuser, Philipp, 2023. "Sports teams' home market size in the digital age: Analyzing social media drawing power," Ilmenau Economics Discussion Papers 175, Ilmenau University of Technology, Institute of Economics.
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    7. Alexander John Bond & Francesco Addesa, 2019. "TV demand for the Italian Serie A: star power or competitive intensity?," Economics Bulletin, AccessEcon, vol. 39(3), pages 2110-2116.

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    More about this item

    Keywords

    Loss aversion; Upset preference; Consumer decisions; Television audience; Football;
    All these keywords.

    JEL classification:

    • Z21 - Other Special Topics - - Sports Economics - - - Industry Studies
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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