Football fandom and loss aversion: A paradox

Loss aversion argues that people are more sensitive to losses than to gains. In general, people value losses more than twice as much as gains. It may even be that people take actions to avoid losses. This may help explain why many people keep large sums of money in deposit accounts rather than invest it in stock markets. Their fear of losing money overrides the chance of significant gains.

Yet, when we turn our attention to football, the behaviour of fans seems to violate the idea of loss aversion.

Consider results for the English Premier league over the five seasons from 2014/15 to 2018/19. Of the 20 clubs competing each season, only three (Manchester City, Tottenham and Arsenal) have won at least half their games. Fans supporting the other 17 clubs were more than likely to experience loss.

Another way to look at this is to consider winners over the past five seasons. In the English Premier League, three teams won – Manchester City, Chelsea and Leicester. This pattern of producing few winners is repeated and may be more extreme in other countries. For example, in the German Bundesliga, Bayern Munich has won each of the past five seasons. In the French Ligue 1, Paris Saint-Germain has won four times as has Barcelona in Spain’s La Liga.

Still, stadiums in England and elsewhere are packed to the brim. How does this stack up against the theory of loss aversion?

These cold statistics line up with more detailed research. A study in 2018 by Peter Dolton and George McKerron of the University of Sussex tracked the responses to 32,000 UK football fans on a smartphone app called Mappiness. The app pings people and asks for their mood at particular times. By combining data on locations of football stadia, match dates, teams playing, and results of those matches, the researchers were able to assess how people’s happiness changed in the hours after a football match. The team a fan was likely to support could also be interpreted from the data.

The app recorded the mood of match goers following a match. The results were stark. “The pain felt by football fans after a defeat is more than double the joy of winning”, the study found. This was coupled with the finding that those in the stadium, rather than elsewhere, had an increased level of jubilation when on the winning side and a higher level of sadness when on the losing side.

What could explain the willingness of so many people to put themselves in such a potentially losing position? With no guarantee of successfully understanding football fans, here are three possible explanations from the behavioural literature.

Being a football fan can be expensive. A 2019 study by KPMG found the average fan in the UK would have to spend on average £1,888 in the season to attend 19 home and five away matches. Some match goers will be less financially stable than others, meaning these costs can be a huge burden to shoulder. Some fans pay up-front for season tickets and others usually need to buy tickets months before a game.

As a result, even before kick-off, many fans are not only emotionally but also financially committed to the match, despite the likelihood of disappointment. In behavioural literature, this is known as the sunk cost fallacy That is the tendency to carry on with a task once an initial commitment that cannot be retrieved has been made.

Many people like to be associated with groups. This partly explains the success of social media platforms such as Facebook, Instagram and Twitter.

Football fans can form particularly strong groups. The book Soccernomics by Simon Kuper and Stefan Szymanski notes that some fans are “Hornbyesque”. The term comes from the depiction of a fanatical fan in Nick Hornby’s novel Fever Pitch. But as Soccernomics argues, not all are so fanatical. Instead, they may be “BIRGers” - those who are ‘Basking In Reflected Glory’ and may be more fickle.

The Hornbyesque fans may have an allegiance to their group that extends beyond the pain of losing. The BIRGers may drift to other clubs when the going gets tough.

The intersection of football and identity need not be local. It can be international.

Various tournaments allow fans all over the world to divert their energy to support their national teams. Whether it be narrowly getting to the provisional group stages or being the favourites of winning the competition, fans come together to back their team until the very end. It is interesting to note the positive changes created from international tournaments, in particular when a national team wins a match or attains a great achievement.

A study published in the May 2020 American Economic Review by Emilio Depetris, Ruben Durante and Filipe Campante, underlined how victories and important sporting achievements in such tournaments fuel unity and trust. Victories by national teams were found to lead individuals to become “significantly more likely to trust and interact with members of other ethnicities”. Inter-ethnic violence is reduced due to these victories, especially when the team is composed of different ethnicities.

Watching a football match at the stadium, or elsewhere, can be an experience that bundles together meeting with friends, a day out and a meal. The match itself is important but is only part of the package that makes an experience. Research suggests people may value experiences more highly than goods.

Consider the fans of midtable or lower league teams who purchase season tickets. These regular match goers will often start their matchday experiences many hours prior to the game itself; discussing and debating everything under the sun, from contending a potential red card to predicting the line-up for the next game. For some fans, it may be the only time they break out into song. The match may be incidental. It is the shared memories and experience of the turbulence of a football match watched together that they value.

There will be different reasons why each match goer and football fanatic is so invested in the face of loss aversion. As football writer and thinker Simon Kuper encapsulates in his article for the Financial Times, football allows people to alleviate themselves from their problems, even if it is only for a moment or two. His philosophical take on the game picks identity as a mainstay of fandom. Some people will hold their identity solely to their football club even through the many losses they must endure. Others will let go. This may be due to losses on the field, a loss of prestige or eventually just losing interest. Who knows? Maybe there is no paradox at all.