FAVORITISM UNDER SOCIAL PRESSURE

This paper is concerned with the effect of nonmonetary incentiveson behavior, in particular with the study of social pressure as adeterminant of corruption. We offer empirical evidence that shows howprofessional soccer referees favor home teams in order to satisfy thecrowds in the stadium. Referees have discretion over the addition of extratime at the end of a soccer game to compensate for lost time due tounusual stoppages. We find that referees systematically favor home teamsby shortening close games where the home team is ahead, and lengtheningclose games where the home team is behind. They show no such bias forgames that are not close. We further find that when the rewards forwinning games increase, referees change their bias accordingly. Lastly, weidentify that the mechanism through which bias operates is to satisfy thecrowd, by documenting how the size and composition of the crowd affectreferee favoritism.[...]