Favouritism and Financial Incentives: A Natural Experiment

Abstract

Principals who exercise favouritism towards certain agents may harm those who are not so favoured. We address this issue in the context of a natural experiment from English soccer. We study the effects of professional referees on a common measure of referee bias: length of injury time in close matches. We find that referees exercised a degree of favouritism prior to professionalism but not afterwards, having controlled for selection and soccer‐wide effects. We also discuss the suitability of the variable that we, and others, use to measure favouritism, noting that alternative interpretations may be possible.

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