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Does it pay to bet on your favourite to win? Evidence on experienced utility from the 2018 FIFA World Cup experiment
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Kossuth, Lajos, Powdthavee, Nattavudh, Harris, Donna and Chater, Nick (2020) Does it pay to bet on your favourite to win? Evidence on experienced utility from the 2018 FIFA World Cup experiment. Journal of Economic Behavior & Organization, 171 . pp. 35-58. doi:10.1016/j.jebo.2020.01.006 ISSN 0167-2681.
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Official URL: https://doi.org/10.1016/j.jebo.2020.01.006
Abstract
This paper examined whether people gained significant emotional benefits from not engaging in emotional hedging – betting against the occurrence of desired outcomes. Using the 2018 FIFA World Cup as the setting for our exploratory study, we found substantial reluctance among England supporters to bet against the success of the England football team in the tournament. This decision not to offset a potential loss through hedging did not pay off in people's happiness following an England win. However, it was associated with a sharp decrease in people's happiness following an England loss, which was a similar experience among subjects who were randomly assigned to bet for an England win. Post-match happiness was relatively more stable among those who chose to hedge or were randomly allocated to hedge. We conclude that people do not hedge enough partly because they tend to overestimate the expected diagnostic cost of betting against their social identity, while underestimate the negative emotional impact from betting on their favourite to win when they did not win.
| Item Type: | Journal Article | ||||||||
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| Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
| Journal or Publication Title: | Journal of Economic Behavior & Organization | ||||||||
| Publisher: | Elsevier Science BV | ||||||||
| ISSN: | 0167-2681 | ||||||||
| Official Date: | March 2020 | ||||||||
| Dates: |
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| Volume: | 171 | ||||||||
| Page Range: | pp. 35-58 | ||||||||
| DOI: | 10.1016/j.jebo.2020.01.006 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Date of first compliant deposit: | 15 January 2020 | ||||||||
| Date of first compliant Open Access: | 3 August 2021 | ||||||||
| Related URLs: |
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