The effect of social pressure when judging favorites and underdogs

Abstract

Numerous studies have shown that social pressure and the reputation of others exert a significant influence on individuals’ decision-making processes. Analyzing how these two factors interact simultaneously in real-world situations poses, however, a formidable challenge. This study aims to shed light on this issue by exploiting a natural experiment in European football involving matches played in empty stadiums over more than two decades. The research examines whether the reduction in refereeing bias in stadiums without a crowd differs depending on whether the home team is the favorite or the underdog, and how this behavior influences match outcomes. Utilizing comprehensive data from 62,923 matches across eight major European leagues (England, France, Germany, Italy, the Netherlands, Portugal, Russia, and Spain) between 1998/99 and 2021/22, a causal model reveals two key results. First, it finds that, under social pressure, referees tend to favor stronger home teams more than weaker home teams. Second, the study observes that, although weaker local teams receive less preferential treatment from referees, social pressure is more important to achieve better results for them than for stronger home teams. This latter result is likely due to the fact that the stronger local teams would have won anyway without the referees’ assistance. The evidence presented strongly supports the idea that the effect of social pressure is moderated by the reputation of the agent being evaluated.