Seemingly Irrelevant Events Affect Perceptions and Expectations - the FIFA World Cup 2006 as a Natural Experiment
16 Pages Posted: 14 Dec 2006
Date Written: September 2006
Abstract
Prominent economic theories have emphasized the role of commonly held perceptions and expectations for determining macroeconomic outcomes. A key empirical question is how such collectively held beliefs are formed. We use the FIFA World Cup 2006 as a natural experiment. We provide direct evidence that seemingly irrelevant events (the outcomes of soccer matches) can systematically affect individual perceptions about economic prospects, both on a personal and economy-wide level.
Keywords: Expectation formation, sunspots, soccer World Cup, macroeconomic outcomes, psychology
JEL Classification: D0, D8, E0
Suggested Citation: Suggested Citation