Essays on sports economicsthe role of incentives and psychological pressure

  1. Varela Quintana, Carlos
Supervised by:
  1. Juan Prieto Rodríguez Director
  2. Julio del Corral Cuervo Co-director

Defence university: Universidad de Oviedo

Fecha de defensa: 19 June 2017

  1. Jaume García Villar Chair
  2. Plácido Rodríguez Guerrero Secretary
  3. Victoria Ateca Amestoy Committee member
  1. Economía

Type: Thesis

Teseo: 483817 DIALNET


The main goal of this doctoral thesis is to analyse the role of psychological pressure and incentives in competitive situations. Professional sport is used as the most appropriate framework for developing this project, as it offers real-life situations that constitute natural experiments, that is, situations where the individuals forming the treatment and control groups have been selected by nature. The work is divided into two parts. The first part, composed of two chapters, presents the theoretical and empirical framework. Chapter 1 contains main theoretical and empirical contributions concerning Behavioural Economics and Sports Economics. Chapter 2 incorporates the main objectives and hypotheses of the research as well as the data sources used. The second part, formed by Chapters 3, 4, 5 and 6, presents the theoretical framework, methodology, results and conclusions of four studies. Finally, Chapter 10 includes the main findings of the research. In the first paper (Chapter 3) second-leg home advantage is analysed. Home advantage in sports is well documented in the literature, being especially relevant in football. For instance, 48% of the matches played in the Spanish First Division between seasons 2000/01 and 2010/11 were won by the local team while the team's winning percentage was less than 28%. Factors related to location, venue, referee bias and overconfidence are usually considered causes of home advantage. Some sports use a two-legged tie format where teams face each other twice, one at home and another away, and the-best-of-two according to the aggregate score qualifies for the next round. In these tournaments, the decision of where to play the first or second match could be quite relevant to the outcome due to the home advantage. Page and Page (2007) found a second-leg home advantage in UEFA competitions. This study continues their line of research by examining whether the second-leg home advantage was more relevant in even matches than in uneven matches. Additionally, we analyse whether playing the second leg at home had a positive impact on the outcomes of the added extra time and penalty shoot-outs, and on the probability of coming back from a bad score in the first leg. To test these hypotheses, 7,075 matches of European competitions between 1960/61 and 2010/11 are analysed. The results obtained from descriptive statistics analysis and probit models provide empirical evidence in favour of our hypotheses. In the second paper (Chapter 4) the existence of an asymmetric impact of the “away goals rule” is tested by analysing its introduction in CONMEBOL club competitions in the season 2005. The “away goals rule” is a sports regulation that lay down that in the case of a draw at the end of regulatory time, the team that scored more goals as a visitor will win, as the main objective of the rule was to decrease the number of draws. However, this solution might have caused different effects on teams, depending on whether they were hosts or visitors in the first or second leg. The results of descriptive analysis and probit models show that the introduction of this rule was followed by an increase of victories for the visitors in the second leg, providing evidence of a “second-mover advantage”. This order effect was especially significant in those even matches where away teams in second leg were better than their opponents, and in two legged-ties whose first leg ended with zero away goals. Several explanations related to behavioural biases, such as psychological pressure, time inconsistency and risk aversion, are proposed. In the third paper (Chapter 5) the impact of increasing the number of substitutions on coaches' choice is studied. The substitution of players during a match has been one of the most significant changes in the Laws of the Game of the association football. FIFA regulated its application in the 1970 World Cup by establishing two replacements, which were expanded to three in 1995. The introduction of a fourth substitution during the extra time of the next 2018 World Cup makes necessary to study how coaches react to an additional substitution. The present research examines coaches’ behaviour before and after the FIFA regulatory reform in 1995 that authorized the third replacement. For this, substitutions made in the Italian Serie A during the seasons 1994/95 and 1995/96 are analysed. Our hypothesis is that teams made more physiological substitutions than tactical ones, which would reflect in a higher proportion of neutral substitutions (replacements of players who belong to the same positions). The results from the estimated discrete choice models found evidence of a change in the coaches’ behaviour giving preference to neutral replacements over tactical substitutions, probably to maintain the game intensity and prevent injuries. The fourth research (Chapter 6) analyses the impact of the three-point rule on sports competitions. Rewards are an essential mechanism in economics; they provide information about scarcity and needs, thus guiding economic agents' behaviour. Understanding the effects of recompense increases is of great interest to many agents in the markets, whether regulators, companies or workers inasmuch as it affects the correct design of incentives in public competitions, patent contests, job promotions, and the relationship of clients with providers or teachers with students. During the last fifteen years, researchers have found in the introduction in football of the ‘three-point victory’ rule a useful natural experiment to analyse the effect of higher rewards in competitive environments. Our aim is to analyse the effect of higher prizes on agents having an advantage in the competition: the home teams. Our main hypothesis is that, as a consequence of the rule change, home teams increased risky play more than away teams, either selecting more offensive players for the starting line-ups or doing more activities subject to sanction. To test whether the introduction of the 3PVR affected the behaviour of teams, whether they are hosts or visitors, we use a Difference-in-Difference (DD) approach, by which we compare the average change over time for the group that introduced the rule (treatment group) and did not (control group). For this, we use the Italian and French leagues as treatment group and the German and Spanish leagues as a control group during 1993/94 and 1994/95 seasons. DD estimates supports the hypothesis that the 3-1-0 rule encourages home and away teams to use a higher quantity of attacking resources (measured through line-ups and substitutions) and a greater intensity of use of them (measured by red and yellow cards). Once teams lead the match, coaches do more defensive substitutions. Furthermore, the rule seems to have contributed to reduce draws but not to increase the number of goals scored by teams, not having been found any significant impact on stadium attendance. DDD estimator gives support for a greater increase of intensity (measured through red cards) in home teams respect to away teams.