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Why Do People Support the Underdog?: Loss Aversion and Sports Fans

Quinn Andrew Wesley Keefer
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Quinn Andrew Wesley Keefer: Department of Economics, California State University San Marcos, San Marcos, CA, USA

International Journal of Applied Behavioral Economics (IJABE), 2015, vol. 4, issue 4, 17-35

Abstract: The choice to be a sports fan may seem irrational in many circumstances, especially when considering fans of teams that are less successful than average. The large amount of evidence showing people are loss averse may make the decision to be a sports fan seem even more irrational. However, this paper presents a model of reference-dependent preferences that predicts being a sports fan, even of an underdog, is an optimal decision. The model predicts it can be optimal to be a fan of a less successful team, even if the individual is loss averse, only cares about game outcomes and believes the team to be less successful than average.

Date: 2015
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Handle: RePEc:igg:jabe00:v:4:y:2015:i:4:p:17-35