Uncertainty of Outcome, in Sports and in Collections of Scholarly Papers

Kjetil K. Haugen
Molde University College


Plácido Rodríguez, Stefan Kesenne & Brad R. Humphreys (eds.)
Outcome Uncertainty in Sporting Events: Winning, Losing and Competitive Balance
176 pages, hardcover.
Cheltenham, Glos: Edward Elgar 2020 (New Horizons in the Economics of Sport)
ISBN 978-1-83910-216-5

I never learn. Yesterday a football match collision (Bayern Munich v Bor. Dortmund and Brighton v Man. United) made me tape one of the matches and watch the other live. I always like to watch matches in full, and when matches are broadcasted in parallel, I normally tape one to watch it later. As always these days, I end up not watching the taped match. Why is that? Getting old, I get forgetful and forget all about yesterday’s German Super-cup match. Then, performing my normal morning routine, I open up the internet on a suitable device, normally my iPad Pro and of course, the first thing I observe is that Bayern won 3-2 against Dortmund yesterday evening.

At this point, I might consider opening up the taped match to fast forward to see the goals, but these days all these goals are typically readily available as a well edited video next to the headline I first saw, and it turns out be far more convenient just to click on the video and see the goals there. As I never learn, a lot of my time these days is used for deleting unseen football matches from local hard drives, SD-cards or even from the “cloud”; not very productive.

The example described above tells me that I (and perhaps many others) obey the so-called Uncertainty of Outcome (UO) hypothesis. The fact that I know the result of the game makes it less attractive for me to see it. In fact, it makes it so unattractive that even the option of watching it for free is too unattractive.

The idea is simple, one major component in the attractiveness of sports competitions (or consumer willingness to pay, as economists perhaps would formulate it) is the fact that there exists uncertainty of the actual match or competition outcome. This hypothesis (introduced by Simon Rottenberg in 1956) has interesting implications for the economic theory of sports. As opposed to most other professional economic activities where all agents aim to outcompete each other, this is not the case in sports. After all, if a sports actor, whether it is an individual athlete or a team, has “killed” all his competitors by repeatedly proven his superiority in competition, there are no competitors left. Nobody would pay for watching Liverpool play against themselves. This calls for structured or balanced competition. In the sport business, it is hence important to “help” the not so good agents in order to keep the show going.

Of course, UO is not the only factor affecting sports spectators, skill or sporting performance is of importance as well. This summer, the Norwegian 400m hurdles expert, Karsten Warholm, has been running several Diamond League races close to the world record. Common for all these races is the lack of in-race competition. As far as I have observed, he has passed the finish line several seconds before number two in all these races, and this should implicate that UO alone is not the only factor to decide spectator interest. Of course, most of these races have been performed almost without physical audiences, due to the Covid-19 situation, but all races have been readily available, even on my free TV-channels, which signals willingness to pay.

Hence, the problem, from the economic-theoretic point of view, is far more complex than simply maximising UO. After all, in that case most sporting contests could be substituted with simple coin tosses or dice throws. None us like to spend time watching such activities.

As discussed above, the UO hypothesis may be considered the most important reason for the existence of sports economics as a stand-alone economic-theoretic subject. This peculiarity calls for alternative economic modelling, different from “traditional” economic theory, and it should not come as a surprise that the majority of scholarly work in the field in one way or another is related to the UO hypothesis. Still, I have never seen a whole book discussing only this subject, and consequently, when my old friend and idrottsforum.org editor Kjell Eriksson asked me for a book review, I said yes without investigating the book closer.

So, what about this book? Are my somewhat gloomy predictions satisfied? Luckily, not to perfection. This book has something that normally secures merit – high quality editors.

This was a bad decision. The book that landed in my mail-box the other day was not a book about uncertainty of outcome as such, it was an edited volume or collection entitled Outcome Uncertainty in Sporting Events: Winning, Loosing and Competitive Balance. The title itself holds great promise, but this particular type of book tells another story; an edited volume is a collection of (stand-alone) papers more or less related to the book’s subject and title (perhaps), put together more for the benefit of the contributors than the readers.

The problem might be the recurring New Public Management (NPM) orientation in today’s academia. This somewhat unpleasant phenomena spreading into our ‘work-places’ like a Californian forest fire, has some slightly unintended consequences. Let me take a quick look at the Norwegian system. Here, there are 2 categories of journals (articles) and publishers (books). The journal article system “pays” the institution (or researcher depending on local decisions) 3 points for a level 2 article and 1 point for a level one article. The total aggregate of all journals for these two levels comprises a subset of all existing journals, so not all journal publishing is rewarded. Book chapters are the analogue to journal articles but are rewarded far more modestly. For instance, and what is relevant here, book chapters in books from level 2 (the best) publishers is rewarded with 0.8 points. As is evident, the rank order is obvious. The (NPM) system values scientific articles in top journals very high. Book chapters published by even top publishing houses are rewarded very modestly in comparison. They are even less rewarded than not so good journal publications and are hence not preferred by “incentive-correct-researchers”.

Surely, these are general and Norwegian specific considerations, and says, as such, not necessarily anything about this book, but it may affect the reader’s interest in the first place, and as far as I know, incentive systems similar – and perhaps even stronger in the same direction –  exist outside Norway. An additional problem with such books is that the editors sign a contract for the book before anything is written (normally). This contract involves a book title and some thoughts on what topics may be included. Then, the process typically continues with the editors going hunting for content. Often the academic network is used, but the mechanisms described above constrain this hunt, and a typical thing that happens is that the number of interested contributors is limited. And, in many cases, the highbrow specific sharp scientific title must to some extent be sacrificed simply in order to finish the volume.

So, what about this book? Are my somewhat gloomy predictions satisfied? Luckily, not to perfection. This book has something that normally secures merit – high quality editors. The three editors Rodriguez, Kesenne and Humphreys constitute a very strong scientific trio, and their own (Kesenne’s and Humphreys’s) contributions in the book (chapters 9 and 11) provide interesting, well-written and sound articles, well related to the topic. I also enjoyed the contribution by James Reade (Chapter 6), also a very interesting, and well-written paper. Reade has collected data from the National football Museum in Preston, UK from the mid-1950s, and has analysed them with great consideration.

So, what about the rest of the book? Three contributions have little or nothing to contribute to the subject. One on loss aversion in tennis, one on wages and one on ticket prices. Do not misunderstand me, I say nothing negative on the quality of these. But, as discussed above, when a relatively specific project such as this is to be documented by means of scholarly papers, it may be hard to fill a collection with only title relevant contributions. The remaining articles relate strong to the title topic, but I believe they have a somewhat replicative structure. In this setting, this means research doing empirical studies other people have done before, either in “new” sports (Tennis and Formula One racing), or in geographically unusual areas (Africa). Again, I hope I am not misunderstood. Replicative studies are important, in order to check if previous results are replicated and hence to establish generality. Still, I (personally) am not that interested.

So, would I recommend the book? The sharp reader has probably already predicted my answer. No, I would not buy it. A quick check on the price at the publisher’s website tells that the list price at the time of writing is GBP 80. At the moment this equals about 1,000 Norwegian kronas. Stiff, if you ask me.

So, I have spent some time and space arguing why these in-the-collection-volumes have obvious potential shortcomings. Does this mean that I avoid publishing book chapters myself? Of course not. I am actually publishing (with a colleague) a book chapter in this type of book, on the same level 2 publishers early next year. After all, incentives work for me as well. Still, I wrote this review, it gives but limited merit, so my conscience is not that bad off.

Copyright © Kjetil K. Haugen

Table of Content

      1. Oliver Budzinski and Arne Feddersen
        Measuring Competitive Balance in Formula One Racing
      2. Carlos Gomez-Gonzalez and Julio del Corral
        Professional tennis in the 21st century: Hawk eye on competitive balance
      3. Stephen Jenkins and E. Frank Stephenson:
        When Teammates are a Drag: The Effect of “Spingate” on the Benefit of NASCAR Drivers Having Teammates
      4. Mikala Lowrance, Jacob Miller and Joshua Price
        Game, Set, Match, and Loss Aversion in Tennis
      5. Bernd Frick and Hannes Winner
        Deferred Compensation when Monitoring is (Nearly) Costless: Evidence from Professional Football
      6. J. James Reade
        A highly disaggregated look at competitive balance.
      7. Thadeu Gasparetto and Angel Baraja
        The competitiveness of football at the national team-level
      8. Luis Carlos Sánchez, Ángel Barajas and Patricio Sánchez-Fernández
        The Price of Football Depends on the Owner of the Ball and the Unbalance of the League
      9. Stefan Kesenne
        Do Football Spectators like Dynasties? Long-term Uncertainty of Outcome and Stadium Attendances
      10. Thabo J. Gopane and Khumo T. Mokgatle
        Empirical Analysis of Match Outcome Uncertainty on Soccer Attendance: Evidence from South Africa
      11. Dennis Coates and Brad R. Humphreys
        Outcome Uncertainty, Home Win Preference, and Econometric Identification of the Game Uncertainty-Attendance Relationship
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