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u/Even-Cell826

r/football r/Anticonsumption r/CPGIndustry r/BehavioralEconomics r/longform r/branding
▲ 6 r/BehavioralEconomics

A World Cup elimination loss is followed by a roughly 0.5% abnormal fall in the losing country's market the next day, and winning does nothing. Real loss aversion in prices, or a fragile 2007 result?

The asymmetry in Edmans, García and Norli (2007, JF) baffles me. Across about 1100 international matches in 39 countries, a World Cup elimination loss is followed by a roughly 0.49% abnormal decline in the losing country's own index the next trading day, net of world market moves. Wins, however, produce no comparable effect. Taken at face value that is loss aversion, or negative affect driven pessimism, priced by the most incentivised participants we have, who have every reason not to.

For one, I am unsure of the robustness. It is an old, famous result, which these days is closer to a yellow flag than a green one, and the headline number rests on only about 56 World Cup elimination games, which sharpens the fragility worry rather than softening it. A 2026 working paper (Gatto, "The reach of the World Cup distraction effect"), as I have seen it summarised, argues the broader World Cup market effect barely registers in the deep, liquid venues that carry most of the world's money, that a couple of ordinary measurement choices can conjure it out of noise, and that the durable bite concentrates among retail investors trading on the result. Worth flagging that Gatto works the distraction and inattention channel rather than re-testing the loss result head on, so it is adjacent evidence, not a direct replication, and I am going off the write-up, not the paper itself. Either way it reframes the question from "markets are irrational" to "a thin slice of participants is, sometimes." Does the original survive modern specification-curve and multiple-testing scrutiny, or is this a well-dressed green jelly bean?

Second, a confound that cannot be ignored. The original sample runs only to the early 2000s, so this next case sits out of sample, but it is the one Edmans himself later used to stress-test the finding against the 2014 tournament. Brazil's 7-1 semi-final loss should, on the mood story, have been about the cleanest negative affect shock going. The Bovespa rose about 1.8%. Edmans' own reading is political, that the defeat was taken as raising the odds the incumbent president lost October's election to a more market friendly rival, and at least one other account puts the move down to macro tailwinds instead. National mood and the market moved in opposite directions, and the fact that two credible explanations compete for the same print is the point: sentiment is not one variable, and any single-event reading is underidentified.

Full piece linked in the comments if useful, but mostly I want the pushback: affect pricing that is real if small, or artifact?

reddit.com
u/Even-Cell826 — 2 days ago
▲ 144 r/football

Your team getting knocked out of the World Cup measurably drops your country's stock market the next day.

There's a study across 39 countries and 1,100 matches which show that when your team goes out of the World Cup, your country's stock market falls the next day, about half a per cent, even after you strip out what the rest of the world's markets did. For England that's roughly £12 billion, gone, because eleven lads in white came home early.

Interestingly, it only runs one way. Losing tanks the market, winning does basically nothing. So in other words, the heartbreak moves money, and the joy doesn't. Anyone who's sat there hollow after a shootout already knew that in their gut, and that feeling is felt by the market.

There are at times exceptions, such as the most infamous scoreline in the tournament's history, and the market went up.

reddit.com
u/Even-Cell826 — 4 days ago
▲ 10 r/BehavioralEconomics

I used Pay in 3 last week and realised I felt absolutely nothing, and it has been bugging me since.

I bought a coat online last week. £90, more than I meant to spend. At the checkout there was the usual Pay Now button, and underneath it a Pay in 3 option. I tapped it without really thinking about it. The coat was on its way, but, nothing had left my account, and, this is the bit that stuck with me, I felt nothing. No little flinch or guilt that usually comes with a purchase.

So I went looking for why, and it turns out there is a name for the thing that was missing. Economists call it the "pain of paying." Spending money gives most people a small, immediate, slightly unpleasant jolt right at the moment of paying. It is not really about whether you can afford it. The jolt is actually useful, it is your brain keeping score in real time. There is even old research showing people will bid nearly twice as much for the same item when paying by card instead of cash, purely because the card softens that jolt.

Cash hurts most, card less, BNPL barely at all. Nothing leaves your account today, the cost gets sliced into three future payments, and we heavily discount future costs, so three payments of £30 feel like almost nothing. The signal that would normally make you pause just never fires.

Klarna does not even hide this. Their whole pitch is transparency, you see the total, you see the dates, you know when you are done. But being shown a number and feeling it are two different things, and they have removed the second one while promoting the first one to you as honesty.

The FCA starts regulating BNPL here in the UK this July, which is basically an attempt to put that pause back in through affordability checks.

reddit.com
u/Even-Cell826 — 1 month ago
▲ 5 r/CPGIndustry+2 crossposts

Your local Gail's bakery exists because Bain Capital ran your postcode through an algorithm

There's a Gail's bakery near me with wood panelling, chalk lettering, painted name above the door in that slightly rough lower-case type, all the visual cues that say "this place is local". Tom Molnar, the CEO, explained on his appearance on the Hungry podcast last year, that his company has spent 8 years building an internal algorithm that scores every postcode in the UK for "Gail's suitability". Inputs reportedly include things like distance from transport links, demographic markets, that kind of thing. Output is a map of where the next branch should go. Bain Capital, which has owned a majority stake since 2021, has been funding the rollout. It had around 170 UK branches in spring of 2025, and is rapidly growing.

So your local bakery is, quite literally, the output of a machine learning model running through a private equity firm in Boston. The wood panelling, the chalk lettering, the suggestion that this place sprang up organically in your particular neighbourhood, all of it is engineered.

But this has become a pattern everywhere. Aesop, has this whole 'each store designed by a local architect to reflect the neighbourhood' marketing thing. It's owned by L'Oréal, who paid 2.5bn dollars for it in August of 2023. So that quirky local Edwardian-apothecary aesthetic you walk into in Yorkville or Mayfair or LA, it's a billion-dollar division of L'Oréal Luxe in Clichy, France.

Innocent Smoothies, a brand that designs their bottle's with hand-drawn halos and periodically have little knitted hats for charity 90%+ owned by Coca-Cola since February 2013. The current CEO is a former Coca-Cola executive named Nick Canney.

Burt's Bees has been a Clorox subsidiary since 2007. Most "small batch" gins on the supermarket shelf are Diageo or Pernod Ricard. The same pattern can be seen everywhere. Find a quality people will pay a premium for ('local', 'small', 'authentic', 'craft'). Decompose it into visual signals (lower-case typography, hand-drawn icons, reclaimed materials, chatty copy). Reproduce the signals at scale with capital behind it.

I keep coming back to the thought of what this does to the high street, in aggregate. The visual surfaces used to tell you, more or less reliably, what was underneath it. A shop that looked independent usually was. That's not really true anymore. The wood panelling no longer means a small shop. The hand-drawn face no longer means a small company. The signature has been industrialised, so the underlying quality is now unreadable from the outside.

The actual independent bakery, the one with no algorithm and no parent company, is now visually indistinguishable from a Gail's. The real ones aren't gone, they're just camouflaged inside a forest of fakes that look exactly like them. Which I'd argue is a worse problem than straight displacement.

Anyway, I went deeper on this on Substack, if anyone's interested. Let me know your thoughts.

https://thelimbic.substack.com/

u/Even-Cell826 — 2 months ago
▲ 493 r/Anticonsumption

Your local Gail's bakery exists because Bain Capital ran your postcode through an algorithm

There's a Gail's bakery near me with wood panelling, chalk lettering, painted name above the door in that slightly rough lower-case type, all the visual cues that say "this place is local". Tom Molnar, the CEO, explained on his appearance on the Hungry podcast last year, that his company has spent 8 years building an internal algorithm that scores every postcode in the UK for "Gail's suitability". Inputs reportedly include things like distance from transport links, demographic markets, that kind of thing. Output is a map of where the next branch should go. Bain Capital, which has owned a majority stake since 2021, has been funding the rollout. It had around 170 UK branches in spring of 2025, and is rapidly growing.

So your local bakery is, quite literally, the output of a machine learning model running through a private equity firm in Boston. The wood panelling, the chalk lettering, the suggestion that this place sprang up organically in your particular neighbourhood, all of it is engineered.

But this has become a pattern everywhere. Aesop, has this whole 'each store designed by a local architect to reflect the neighbourhood' marketing thing. It's owned by L'Oréal, who paid 2.5bn dollars for it in August of 2023. So that quirky local Edwardian-apothecary aesthetic you walk into in Yorkville or Mayfair or LA, it's a billion-dollar division of L'Oréal Luxe in Clichy, France.

Innocent Smoothies, a brand that designs their bottle's with hand-drawn halos and periodically have little knitted hats for charity 90%+ owned by Coca-Cola since February 2013. The current CEO is a former Coca-Cola executive named Nick Canney.

Burt's Bees has been a Clorox subsidiary since 2007. Most "small batch" gins on the supermarket shelf are Diageo or Pernod Ricard. The same pattern can be seen everywhere. Find a quality people will pay a premium for ('local', 'small', 'authentic', 'craft'). Decompose it into visual signals (lower-case typography, hand-drawn icons, reclaimed materials, chatty copy). Reproduce the signals at scale with capital behind it.

I keep coming back to the thought of what this does to the high street, in aggregate. The visual surfaces used to tell you, more or less reliably, what was underneath it. A shop that looked independent usually was. That's not really true anymore. The wood panelling no longer means a small shop. The hand-drawn face no longer means a small company. The signature has been industrialised, so the underlying quality is now unreadable from the outside.

The actual independent bakery, the one with no algorithm and no parent company, is now visually indistinguishable from a Gail's. The real ones aren't gone, they're just camouflaged inside a forest of fakes that look exactly like them. Which I'd argue is a worse problem than straight displacement.

Anyway, I went deeper on this on Substack, if anyone's interested. Let me know your thoughts.

https://thelimbic.substack.com/

u/Even-Cell826 — 2 months ago