What are the odds? Underdog brands are consumer favorites

Richard Borghesi, Andy Naranjo and Michael Ryngaert

Economics Letters, 2022, vol. 221, issue C

Abstract: We examine the association between product endorser quality, performance expectations, and abnormal stock returns of corporate sponsors and identify a pronounced underdog effect — marginal excess returns to sponsors of the biggest underdogs are roughly double those of the biggest favorites. Results indicate that consumers are more excited about and more motivated to support brands having an underdog narrative.

Keywords: Sponsorship; Underdogs; Stock returns; Betting market; Odds (search for similar items in EconPapers)
JEL-codes: G14 L67 M31 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:221:y:2022:i:c:s0165176522003883

DOI: 10.1016/j.econlet.2022.110914

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