Do Fans Want Close Contests? A Test of the Uncertainty of Outcome Hypothesis in the National Basketball Association

28 Pages Posted: 13 Oct 2010

See all articles by Daniel A. Rascher

Daniel A. Rascher

University of San Francisco - Sport Management Program; SportsEconomics; OSKR, LLC

John Solmes

KPMG International, LLP

Date Written: June 15, 2007

Abstract

The National Basketball Association claims to sell entertainment. Part of that entertainment is close, competitive contests with uncertain outcomes. However, hometown fans want the home team to win. Hence, the optimal probability that the home team wins a game, from the perspective of maximizing demand, lays somewhere between 0.5 and 1.0. Using data from individual games for the 2001-02 season, this optimal probability was estimated to be approximately 0.66. Fans want their home team to have about twice the chance to win a game as the visiting team.

Keywords: uncertainty of outcome, basketball, linear regression, home court advantage, demand, attendance

JEL Classification: L83, D12

Suggested Citation

Rascher, Daniel A. and Solmes, John, Do Fans Want Close Contests? A Test of the Uncertainty of Outcome Hypothesis in the National Basketball Association (June 15, 2007). Available at SSRN: https://ssrn.com/abstract=1690886 or http://dx.doi.org/10.2139/ssrn.1690886

Daniel A. Rascher (Contact Author)

University of San Francisco - Sport Management Program ( email )

San Francisco, CA 94117
United States

SportsEconomics ( email )

2200 Powell St.
Emeryville, CA 94608
United States

OSKR, LLC ( email )

6425 Christie Avenue
Suite 230
Emeryville, CA 94608
United States

John Solmes

KPMG International, LLP ( email )

KPMG Tower
Bishop Aboyade Cole Street
Victoria Island, Lagos State
Switzerland

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