[losing hurts more than winning feels good] This paper examined whether people gained substantial 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 favorite to win when they did not win.

[Keywords: hedging, happiness, social identity, wellbeing, World Cup, experienced utility]

…we conducted a series of ‘lab in the field’ experiments on voluntary participants at the University of Warwick between mid-June and early July in 2018.

There were 3 stages to our experimental design. In the first stage, which was conducted two weeks before the World Cup started, we recruited volunteered participants by sending emails to students registered in the SONA system (Sample 1; n = 338) and asked them to fill in an online questionnaire generated by Qualtrics that was designed to elicit their general attitudes towards the World Cup.² Using a lottery prize draw as an incentive, we asked our participants to self-report on the extent to which they were looking forward to the World Cup, the team that they usually supported, the team that they thought would win the World Cup, their nationality, and their gender.³ The logic behind this procedure was to screen out subjects who had little or no interest in, or knowledge about, the upcoming World Cup.

This produces a subsample of 94 subjects (Sample 2), who (1) were looking forward to the World Cup, and (2) had explicitly declared England either as their first, second or third favorite team in the event.⁴

n the second stage of the experiment, subjects in Sample 2 were randomly assigned to one of the 3 treatment groups: the “Free choice”, the forced-choice “Bet for England”, and the forced-choice “Bet for England’s opponent”.

There were two primary reasons for our decision to randomize subjects into either one of the forced-choice options, as well as the free choice group. Firstly, subjects’ betting decisions and their experienced happiness in the free choice group are potentially endogenous to different unobserved individual characteristics, i.e. latent individual fandom, for example. And secondly, we had anticipated that the number of people voluntarily choosing to hedge in the free choice group will not be large enough to make meaningful statistical inferences. Hence, the decision to randomize subjects into betting for England’s opponent to win allowed us to estimate the effect of hedging on post-match experience for those who, without the randomization, would not have hedge had they been given a free betting choice.

In order to minimize learning and streak-related behaviors such as gambler and hot-hand fallacies that might arise from facing the same choice several times in a row, we repeated the random assignment of subjects into different treatments each time before the start of each England match in the World Cup.

Hence, depending on the luck of the draw, each subject could have been in one treatment for one of the England matches, and another in another one of the England matches. There were 6 England matches in total5 : England vs. Tunisia (1^st Group stage); England vs. Belgium (3^rd Group stage); England vs. Colombia (2^nd round); England vs. Sweden (Quarterfinals); England vs. Croatia (Semi-finals); and England vs. Belgium (3^rd/4^th playoff)

…In the final stage, all subjects were sent the same post-match questionnaire to be completed within 24 h following the conclusion of the match in that round. Included in the survey were questions about their current happiness in general, current happiness specific to the outcome of the match, whether they watched the match, as well as feelings regret, their gender, and their nationality. They were also paid £2 participation fee.

It is important to note here that subjects were only paid participation fees if they had completed both pre & post-match questionnaire: this way, they either received £4 for participating plus the return from hedging.

…only a minority (17.2%) of the England supporters in our sample chose to bet for the opponent to win.

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