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Florian Auferoth, Alma Cohen & Zvika Neeman, Judging Under Public Pressure, 106 Rev. of Econ. & Stat. 151 (2024).

Abstract: Individuals who engage in “judging” – that is, render a determination in a dispute or contest between two parties – might be influenced by public pressure to favor one of the parties. Many rules and arrangements seek to insulate such individuals from public pressure or to address the effects of such pressure. We study this subject empirically, investigating the circumstances in which public pressure is more and less likely to affect judging. Using detailed data from the Bundesliga, Germany’s top soccer league, our analysis of how crowd pressure affects the decisions of referees yields two key insights. First, we show that crowd pressure biases referee’s decisions in favor of the home team for those decisions that cannot be unambiguously identified as erroneous but not for those decisions that can. In particular, referees exhibit a bias in favor of the home team with respect to more subjective decisions such as the showing of yellow cards (cautions), which is based on the referee’s judgment call, but not with respect to more objective decisions such as validating goals and awarding penalty kicks, where live TV coverage often allows for objective identification of errors. Second, we show that the effect of crowd pressure on referee decisions depends on the extent to which such pressure is viewed by the referee as understandable or reasonable (or even justified).Specifically, a referee’s bias in favor of the home team in yellow card issuance is strengthened after the referee makes an objectively identifiable error against the home team and thus might view crowd heckling as understandable. This effect is stronger when the referee’s error is costlier to the home team because the game is more important or the error is more consequential due to the closeness of the game at the time of the error. The introduction of VAR (Video Assisted Referee) technology in 2017 and Covid-19, which caused games to be played without crowds for the second part of the 2019-20 season allows us to test our results under three different regimes (pre-VAR, post-VAR, and post-VAR but without any crowd).Inspection of the results under these three different regimes serves to reinforce them. As expected, VAR reduces the number of referee errors, but the pattern of no bias with respect to errors is preserved. VAR has no effect on the number of yellow cards. Once the crowd disappears, so does the home advantage in field goals. Referee errors are unaffected, but the home bias with respect to yellow cards disappears as well. This confirms the effect that the crowd has on referee’s more subjective decisions.