Contest Incentives, Effort Levels and Betting Markets in European Football

20 Pages Posted: 6 Dec 2015

See all articles by Arne Feddersen

Arne Feddersen

University of Southern Denmark - Department of Environmental and Business Economics

Brad R. Humphreys

West Virginia University - Department of Economics

Brian Soebbing

University of Alberta-Faculty of Kinesiology, Sport, and Recreation

Date Written: June 1, 2012

Abstract

Tournament theory (Lazear and Rosen, 1981) predicts that effort supplied in contests varies with the incentive structure. Previous research finds that outcomes in individual and team sports events reflect variable effort supply by contestants. We develop evidence that a market-based measure of expected outcomes in contests, betting odds, also reflect variable effort supply. Empirical analysis of more than 40,000 regular season football matches in 10 top domestic European leagues shows that betting odds on matches reflect variation in incentives to supply effort generated by the structure of the league, in terms of the promotion and relegation structure and qualification for pan-European competitions, and the specific position of the teams on the league table.

Keywords: tournament theory, sports betting, football

JEL Classification: L81, G14

Suggested Citation

Feddersen, Arne and Humphreys, Brad R. and Soebbing, Brian, Contest Incentives, Effort Levels and Betting Markets in European Football (June 1, 2012). Available at SSRN: https://ssrn.com/abstract=2699295 or http://dx.doi.org/10.2139/ssrn.2699295

Arne Feddersen

University of Southern Denmark - Department of Environmental and Business Economics ( email )

DK-5230 Odense
Denmark

Brad R. Humphreys

West Virginia University - Department of Economics ( email )

Morgantown, WV 26506
United States

Brian Soebbing (Contact Author)

University of Alberta-Faculty of Kinesiology, Sport, and Recreation

Edmonton, Alberta
Canada

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