The Behavioral Economics of Competitive Balance: Theories, Findings, and Implications

Despite the prominence and relevance of the uncertainty-of-outcome hypothesis (UOH) for professional sports worldwide, decades of empirical research have not been successful in establishing clear evidence for the importance of outcome uncertainty for stadium attendance and TV audience. In this regard, some recent papers were developed drawing upon a body of behavioral economic thoughts that might help to better understand the divergence between the UOH, competitive balance, and consumer choices. Since this literature has so far focused on different facets of behavioral economics, it is the objective of this paper to summarize and review the existing literature, discuss possible policy implications that can be derived from behavioral thinking in this context, and point out further research avenues.