Consuming Contests: Outcome Uncertainty and Spectator Demand for Contest-based Entertainment

60 Pages Posted: 10 Feb 2021 Last revised: 20 Jul 2021

See all articles by Patrick J. Ferguson

Patrick J. Ferguson

The University of Melbourne

Karim R. Lakhani

Harvard Business School - Technology and Operations Management Group; Harvard Institute for Quantitative Social Science; Harvard University - Berkman Klein Center for Internet & Society

Date Written: February 7, 2021

Abstract

Contests that non-contestants consume for entertainment are a fixture of economic, cultural and political life. We look to professional sports and exploit injury-induced changes to teams' line-ups to examine whether individuals prefer to consume contests that have more uncertain outcomes. Using data from the Australian Football League, we fi nd that a one standard-deviation increase in game outcome uncertainty causes, on average, an 11.2% increase in attendance. Our results extend
research on contest design and information preferences by showing that spectators strongly prefer evenly-balanced contests and appear to derive entertainment utility from suspense and the resolution of uncertainty.

Keywords: Contest design, information preferences, consumer demand

JEL Classification: Z20, L82, L83, M55

Suggested Citation

Ferguson, Patrick J. and Lakhani, Karim R., Consuming Contests: Outcome Uncertainty and Spectator Demand for Contest-based Entertainment (February 7, 2021). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 21-087, Available at SSRN: https://ssrn.com/abstract=3783339 or http://dx.doi.org/10.2139/ssrn.3783339

Patrick J. Ferguson

The University of Melbourne ( email )

Parkville, 3010
Australia

Karim R. Lakhani (Contact Author)

Harvard Business School - Technology and Operations Management Group ( email )

Boston, MA 02163
United States
617-495-6741 (Phone)

Harvard Institute for Quantitative Social Science ( email )

1737 Cambridge St.
Cambridge, MA 02138
United States

Harvard University - Berkman Klein Center for Internet & Society ( email )

Harvard Law School
23 Everett, 2nd Floor
Cambridge, MA 02138
United States

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