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Outcome Uncertainty, Reference-Dependent Preferences and Live Game Attendance

Dennis Coates (), Brad Humphreys and Li Zhou ()

No 2012-7, Working Papers from University of Alberta, Department of Economics

Abstract: We develop a consumer choice model of live attendance at a sporting event with reference-dependent preferences. The predictions of the model motivate the “uncertainty of outcome hypothesis” (UOH) as well as fan’s desire to see upsets and to simply see the home team win games, depending on the importance of the reference-dependent preferences and loss aversion. A critical review of previous empirical tests of the UOH reveals significant support for models with reference-dependent preferences, but less support for the UOH. New empirical evidence from Major League Baseball supports the loss aversion version of the model.

Keywords: uncertainty of outcome hypothesis; attendance demand; prospect theory (search for similar items in EconPapers)
JEL-codes: D12 L83 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2012-04-03
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-spo, nep-tur and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2012_007

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