Consuming Contests: The Effect of Outcome Uncertainty on Spectator Attendance in the Australian Football League

39 Pages Posted: 10 Feb 2021 Last revised: 10 Apr 2023

See all articles by Patrick J. Ferguson

Patrick J. Ferguson

The University of Melbourne

Karim R. Lakhani

Harvard Business School - Technology and Operations Management Group; Harvard Institute for Quantitative Social Science; Harvard University - Berkman Klein Center for Internet & Society

Date Written: March 15, 2023

Abstract

Contests that non-contestants consume for entertainment are a fixture of economic, cultural and political life. We exploit injury-induced changes to teams’ line-ups in a professional sports setting to examine whether individuals prefer to consume contests that have more uncertain outcomes. Studying data from the Australian Football League, we use an instrumental variables design to show that a one standard-deviation increase in game outcome uncertainty causes, on average, an 11.2% increase in attendance. When presented alongside ordinary least square's estimates, our results suggest that prior studies may heavily underestimate spectators' preferences for evenly-balanced contests.

Keywords: Contest design, information preferences, consumer demand

JEL Classification: Z20, L82, L83, M55

Suggested Citation

Ferguson, Patrick J. and Lakhani, Karim R., Consuming Contests: The Effect of Outcome Uncertainty on Spectator Attendance in the Australian Football League (March 15, 2023). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 21-087, Available at SSRN: https://ssrn.com/abstract=3783339 or http://dx.doi.org/10.2139/ssrn.3783339

Patrick J. Ferguson

The University of Melbourne ( email )

Parkville, 3010
Australia

Karim R. Lakhani (Contact Author)

Harvard Business School - Technology and Operations Management Group ( email )

Boston, MA 02163
United States
617-495-6741 (Phone)

Harvard Institute for Quantitative Social Science ( email )

1737 Cambridge St.
Cambridge, MA 02138
United States

Harvard University - Berkman Klein Center for Internet & Society ( email )

Harvard Law School
23 Everett, 2nd Floor
Cambridge, MA 02138
United States

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