Brian P. Soebbing

Tournament incentives, league policy, and NBA team performance revisited.

Taylor and Trogdon found evidence of shirking under some, but not all, draft lottery systems used in three different National Basketball Association (NBA) seasons. The authors use data from all NBA games played from 1977 to 2007 and a fixed effects model to control for unobservable team and season heterogeneity to extend this research. The authors find that NBA teams were more likely to intentionally lose games at the end of the regular season during the seasons where the incentives to finish last were the largest.

Consumer behaviour in lottery: the double hurdle approach and zeros in gambling survey data

Governments world-wide increasingly rely on gambling revenues, increasing the importance of understanding who gambles and why. Previous literature used Tobit and Heckman models to statistically analyse participation in gambling. These models make strong assumptions about the nature of gambling participation. We examine the double hurdle model as an alternative to other statistical approaches to modelling gambling participation and spending for lotteries in the province of Alberta, Canada. Our results for lotteries, based on data from a 2002 survey of gambling prevalence in Alberta, clearly prefer the double hurdle model, which yields different results than the commonly used Tobit model. This has important implications for governments who rely on revenues from lottery to fund many different programs in their jurisdictions.

Major League Baseball and Twitter Usage: The Economics of Social Media Use

From the perspective of economic demand theory, this study examines the factors that determine daily changes in Twitter following of Major League Baseball teams as a form of derived demand for a sport product. Specifically, a linear regression model is constructed by taking consideration of factors relevant to fan interest: team performance, market characteristics, scheduling, and so on. The results reveal specific determinants that have significant relationship with Twitter following. From a team management perspective, factors such as the content of social media messages, certain calendar events, and postseason appearances can be used to enhance fan interest on social media. In so doing, it brings together communication inquiries and economic literature by delineating a comprehensive and nuanced account of interpreting sport social media from a consumer demand perspective.

Managing legitimacy and uncertainty in professional team sport: the NBA's draft lottery

Purpose – The purpose of this paper is to discuss the complexity of – and conflicts inherent in – managing sports leagues at both the league and franchise level.Design/methodology/approach – The paper draws on changes to the National Basketball Associations (NBA) amateur entry draft, which has attempted to balance the need to preserve league parity and reduce the incentive for teams to deliberately lose games in order to improve draft position.Findings – The discussion reveals the conflict between league and team goals. In addition, using Olivers strategic decisions as a framework, the findings also illustrate how sport league commissioners have to balance pressures from both the internal and external environments.Originality/value – This paper expands our understanding of how leagues manage institutional pressures, and how these pressures impact the team, leagues, and the decision makers involved.

Do Gamblers Think That Teams Tank? Evidence from the NBA

A growing body of literature indicates that sports teams face incentives to lose games at the end of the season. This incentive arises from league entry draft policy. We use data from betting markets to confirm the existence of tanking, or the perception of tanking, in the NBA. Results from a SUR model of point spreads and point differences in NBA games indicate that betting markets believe that tanking takes place in the NBA, even though the evidence that tanking actually exists is mixed. NBA policy changes also affect betting market outcomes.

Sentiment Bias in National Basketball Association Betting

We develop evidence of bettors with sentiment bias in the betting market on National Basketball Association (NBA) games. We use measures of team popularity (arena capacity utilization and team all-star votes received) as proxies for the presence of biased bettors. Analysis of point spreads and bet outcomes for more than 32,000 NBA games played in 1981-2012 shows that bookmakers increase prices on games involving popular home teams, an outcome consistent with sentiment bias. These changes in prices do not translate into higher returns for bettors, suggesting that bookmakers shade point spreads to increase profits.

Ticket Price Behavior and Attendance Demand in Chinese Professional Soccer

There exists diverse research examining the attendance at professional sporting events from a North American and European perspective (Watanabe, Int J Sport Finance 7:309–323, 2012). However, there are a limited number of studies that have considered attendance for sporting leagues and events in Asia, with most of these studies focused on the Nippon Professional Baseball League (Leeds and Sakata, J Sports Econ 13:34–52, 2012; Yamamura and Shin, J Socio-Econ 37:1412–1426, 2008; Appl Econ 41:3257–3265, 2009). This research examines attendance for professional soccer in the Chinese Super League (CSL) over an entire season. Analysis of this league is of great interest because of the unique pricing structures employed by various franchises that belong to the CSL. Specifically, several CSL franchises employ only a single price point for a ticket to their match, while major professional sport leagues in North America and Europe offer multiple prices at which to enter matches. The practice of price dispersion, the selling of tickets to a single event at different price levels, in the CSL provides researchers with the chance to examine how teams employing different pricing practices in a league may affect attendance. Price dispersion theory indicates that the use of multiple prices for a product should allow a firm to capture more consumer surplus, and previous empirical examinations have found evidence of increased demand or revenues for organizations using price dispersion (Humphreys and Soebbing, Econ Lett 114:304–307, 2012; Huntington, J Cult Econ 17:71–87, 1993). This chapter will thus test whether price dispersion has a positive relationship with attendance in the CSL.

Novelty effects and sports facilities in smaller cities: Evidence from Canadian hockey arenas

Like their larger counterparts, smaller cities use public funds to build facilities to host local sports franchises. One argument for doing so is the new economic activity and attendance new facilities generate. However, academic research examining both major league stadium/arenas and minor league baseball stadiums finds a novelty effect – a brief period of higher attendance – exists but not a long-term sustainable increase for new facilities. This paper extends the research on small cities and novelty effects of sports facilities by integrating and exploring how city size and proximity influences the novelty effect of new hockey arenas in smaller communities. Results show a novelty effect for new facilities built to host Canadian Hockey League franchises for the first five years. In small cities, the novelty effect occurs only in years three through five after opening.

Chinese Super League: attendance, pricing, and team performance

Purpose The purpose of this paper is to examine the impact of team performance, price dispersion – having multiple ticket prices for a single event, and market characteristics on fan attendance. By considering the context of the Chinese Super League (CSL), this study considers multiple strategies for enhancing the demand for sport in relation to factors on- and off-the-field of play. Design/methodology/approach This study uses economic demand theory to examine consumer interest in sporting events in relation to pricing. Through employing econometric modeling, regression analysis is used to estimate results from match-level data encompassing multiple seasons. Findings The findings estimated from the linear regressions indicate that using multi-tiered pricing for sporting events does not significantly enhance demand in this context. Furthermore, it is found that consumers are responsive to matches against rival teams and strong opponents. Research limitations/implications The results run counter to prior literature on price dispersion, indicating that attendance demand may not always be influenced by the number of price points. Practical implications The findings help to develop an understanding of how team performance and pricing are important parts of meeting organizational goals in sport. From this, strategies can be formed to help stakeholders and managers in improving organizational performance. Originality/value This research is one of the first to consider the CSL, where both single and multiple price points exist for sporting events. Thus, it helps to build both theoretical and empirical knowledge in regards to the importance of pricing systems.

Determinants of expected vs. actual match outcome: an examination of the German Bundesliga

Within society, there are many publications regarding expectations of firm performance. These include analysis, industry insiders and ranking service. Within sports, bookmakers provide betting odds that reflect the expected outcome of matches and are determined by several factors. The purpose of this study is to analyse the determinants of expected match outcome (i.e. betting odds) and compare them to those of actual match outcome. Data from the 2010/2011 season of the German Bundesliga (soccer) are made available that are combined with betting odds for each match. Regression results show that several factors, such as difference in standing between team and opponent, difference in competitions played, difference in points earned over the last five matches, differences in standing last season and home advantage significantly influence expected match outcome. On the contrary, actual match outcome is only determined by the latter two factors.