For What It's Worth: Outcome Bias in Managerial Decisions

Jan C. van Ours
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Jan C. van Ours: Erasmus University Rotterdam

No 25-054/V, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Decisions informed by past events can be distorted when outcomes partially determined by chance are misinterpreted as purely skill-based. This can lead to outcome bias, where decisions are evaluated based on results rather than the quality of the performance that produced them. Outcome bias is prevalent across domains, including managerial decision-making. This paper investigates outcome bias in professional football, a highly competitive industry. The analysis is based on managers who were replaced within-season from 2017/18 to 2024/25 in the top divisions of the five main European football leagues. The main finding is that clubs tend to change managers in response to recent match results rather than underlying performance indicators. This behavior reflects an economically inefficient decision-making process driven by outcome bias.

Keywords: Outcomebias; professionalfootball; bookmakerodds; managerreplacement (search for similar items in EconPapers)
JEL-codes: C20 L83 M12 Z20 (search for similar items in EconPapers)
Date: 2025-09-19
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