Do Salaries Improve Worker Performance?

We establish the effects of salaries on worker performance by exploiting a natural experiment in which some workers in a particular occupation (football referees) switch from short-term contracts to salaried contracts. Worker performance improves among those who move onto salaried contracts relative to those who do not. The finding is robust to the introduction of worker fixed effects indicating that it is not driven by better workers being awarded salary contracts. Nor is it sensitive to workers sorting into or out of the profession. Improved performance could arise from the additional effort workers exert due to career concerns, the higher income associated with career contracts (an efficiency wage effect) or improvements in worker quality arising from off-the-job training which accompanies the salaried contracts.incentives, salaries, productivity, sports

The Twelfth Man? Refereeing Bias in English and German Soccer

This paper investigates potential bias in awards of player disciplinary sanctions, in the form of cautions (yellow cards) and dismissals (red cards) by referees in the English Premier League and the Bundesliga. Previous studies of behaviour of soccer referees have not adequately incorporated within-game information. Descriptive statistics from our samples clearly show that home teams receive fewer yellow and red cards than away teams. But biases may be wrongly identified where the modeller has failed to include within-game events such as goals scored and recent cards issued. What appears as referee favouritism may actually be excessive and illegal aggressive behaviour by players in teams that are behind in score. We deal with these issues using a minute-by-minute bivariate probit analysis of yellow and red cards issued in games over six seasons in the two leagues. The significance of a variable to denote score difference at the time of sanction suggests that excessive effort, induced by a losing position, is an important influence on award of yellow and red cards. Controlling for a number of pre-game and within-game variables, we find evidence of home team favouritism in Germany as home teams with running tracks in their stadia attract more yellow and red cards than teams playing in stadia with separation of fans from pitch. This is indicative of referee response to social pressure. Separating the competing teams in matches by favourite and underdog status, as perceived by the betting market, yields further evidence, this time for both leagues, that the source of home teams receiving fewer cards is not just that they are disproportionately often the favoured team. Rather, there appears to be pure referee bias in relative treatments of home and away teams.Soccer, football, referee, sports

An analysis of consumer response to corruption:Italy's Calciopoli scandal

The literature on economics of corruption is lacking in evidence on consumer responses to identifiable scandals. The Calciopoli episode affecting Italian football in the 2005/06 season serves as an opportunity for an empirical investigation into consumer (fan) behaviour following punishments imposed by the Italian league on clubs whose officials were found guilty of corrupt practices. Using a difference-in-difference estimation method, where the convicted teams are the treatment group, we find that home attendances for treated teams fell by around 16%, relative to control group teams defined as those clubs not subject to league-imposed punishment. We show further that the fall in attendances identified with Calciopoli punishment resulted in non-trivial gate revenue reductions. Our results suggest that a sizeable number of fans of the punished clubs were subsequently deterred from supporting their teams inside the stadium. We explore alternative explanations of this adverse fan response

Systematic Positive Expected Returns in the UK Fixed Odds Betting Market: An Analysis of the Fink Tank Predictions

We report striking evidence of semi-strong inefficiency in the UK fixed-odds football betting market using a reputable newspaper tipster which offers probabilities of match outcomes rather than simple result indicators. Betting on the Fink Tank probabilities of home wins across 10 bookmakers, when there are positive expected returns, would have generated positive returns in each of the seasons from 2006–07 to 2011–12 for a variety of different betting strategies. These returns could have been enhanced by employing the best odds from a greater number of bookmakers. However, the fact that pure arbitrage bets have existed for years and appear to last for several hours or days suggest they are in practice not exploitable to a magnitude that poses any threat to bookmakers

On the positive expected utility of combination wagers

We demonstrate that a utility maximizing individual with an everywhere concave utility function may optimally wager on two or more outcomes in an event even though the expected returns to a unit stake are negative on all outcomes except one

Special Ones? The Effect of Head Coaches on Football Team Performance

Using data from professional football leagues in four countries, we assess the effects on team performances following head coach turnover, distinguishing between voluntary and involuntary exits. We use entropy balancing to deal with the endogeneity of coach departures, by reweighting pre‐departure covariates to obtain a comparable control group. Results reveal little, if any, positive effect from either type of turnover, though some longer‐term benefits are possible if teams experience no subsequent turnover. We discuss how these findings fit with previous literature and theory, and discuss the wider practical implications

UNSCRIPTED DRAMA: SOCCER AUDIENCE RESPONSE TO SUSPENSE, SURPRISE AND SHOCK

By modeling minute‐by‐minute television audience figures from English Premier League soccer matches, with close to 50,000 minute‐observations, we show that demand is partly driven by suspense and surprise. We also identify an additional relevant factor of appeal to audiences, namely shock, which refers to the difference between pre‐match and current game outcome probabilities. Suspense, surprise, and shock remain significant in the presence of a traditional measure of outcome uncertainty. (JEL C23, D12, L82, L83, Z20