Physiology, Psychology, and Stock Market Performance: Evidence from Sleeplessness and Distraction in the World Cup

Abstract

We study the stock market impact of one physiological factor, sleeplessness due to watching World Cup games overnight, and two psychological factors, distraction from games during trading hours and mood changes due to wins and losses of the games. We uncover significantly negative effects of sleeplessness and distraction on stock returns, and the effects are stronger for countries with better soccer game records. While we find a market decline after soccer losses as documented in the existing literature, it is weakened after considering sleeplessness and distraction.