The Magic of the Game:Experimental Evidence on Sports Betting Behavior

Martin Chegere (), Paolo Falco, Marco Nieddiu (), Lorenzo Pandolfi and Mattea Stein
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Martin Chegere: University of Dar es Salaam
Marco Nieddiu: University of Cagliari

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: As sports betting is surging worldwide, so are concerns about excessive gambling. To explore the drivers of this phenomenon, we conduct an experiment investigating how regular sports bettors in urban Tanzania value sports bets and form expectations about winning probabilities. We find that subjects assign higher certainty equivalents and winning probabilities to sports bets than to urn-and-balls lotteries with identical odds, even though, in fact, they are not more likely to win. We complement the experimental evidence with original survey data on sports betting frequency and motives. Overall, our results suggest that systematic misperceptions of the risks and returns associated with sports betting may contribute to its booming popularity.

Keywords: betting; misperceptions; framing effects; sports. (search for similar items in EconPapers)
JEL-codes: C91 D84 D91 G41 L83 O12 (search for similar items in EconPapers)
Date: 2022-11-17, Revised 2024-11-15
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-spo
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