nep-spo New Economics Papers
on Sports and Economics
Issue of 2005‒01‒02
nine papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior, Portugal

  1. Confidence-Enhanced Performance By Olivier Compte; Andrew Postlewaite
  2. Competitive balance and gate revenue sharing in team sports By Késenne Stefan; Szymanski S.
  3. The salary cap proposal of the G-14 in European football By Késenne Stefan
  4. Revenue sharing and competitive balance. Does it invariance proposition hold? By Késenne S.
  5. Economic Multipliers and Mega-Event Analysis By Victor Matheson
  6. Padding Required: Assessing the Economic Impact of the Super Bowl By Victor Matheson; Robert Baade
  7. Mega-Sporting Events in Developing Nations: Playing the Way to Prosperity? By Victor Matheson; Robert Baade
  8. The Effects of Labor Strikes on Consumer Demand: A Re-examination of Major League Baseball By Victor Matheson
  9. Is Smaller Better? A Comment on "Comparative Economic Impact Analyses" by Michael Mondello and Patrick Rishe By Victor Matheson

  1. By: Olivier Compte (Ecole Nationale des Ponts et Chaussées (ENPC) - Centre d'Enseignement et de Recherche en Analyse Socio-Economique (CERAS)); Andrew Postlewaite (Department of Economics, University of Pennsylvania)
    Abstract: There is ample evidence that emotions affect performance. Positive emotions can improve performance, while negative ones may diminish it. For example, the fears induced by the possibility of failure or of negative evaluations have physiological consequences (shaking, loss of concentration) that may impair performance in sports, on stage or at school. There is also ample evidence that individuals have distorted recollection of past events, and distorted attributions of the causes of successes of failures. Recollection of good events or successes is typically easier than recollection of bad ones or failures. Successes tend to be attributed to intrinsic aptitudes or own effort, while failures are attributed to bad luck. In addition, these attributions are often reversed when judging the performance of others. The objective of this paper is to incorporate the first phenomenon above into an otherwise standard decision theoretic model, and show that in a world where performance depends on emotions, biases in information processing enhance welfare.
    Keywords: Confidence, Perception, Psychology
    JEL: D8
    Date: 2001–05–01
  2. By: Késenne Stefan; Szymanski S.
    Abstract: This paper shows that under reasonable conditions that increasing gate revenue sharing among teams in a sports league will produce a more uneven contest, i.e. reduce competitive balance. This result has significant implications for antitrust authorities and legislators, who have tended to assume that revenue sharing arrangements will necessarily promote competitive balance.
    Date: 2003–03
  3. By: Késenne Stefan
    Abstract: In this paper we try to show that a salary cap, as it is proposed by the G-14, the association of the 18 most successful clubs in European football, is fundamentally different from the salary cap as it has been introduced in some major leagues in the U.S. Whatever the objectives, the impact of these two types of salary caps on the distribution of playing talent, which is the most important determinant of the competitive balance in a sports league, can be very different, depending, among other things, on the cost structure of the large and the small market clubs.
    Date: 2003–07
  4. By: Késenne S.
    Abstract: This short paper, challenging the so-called invariance proposition, argues that, for a general n-team model with profit maximizing clubs and concave revenue functions, there are reasons to believe that revenue sharing can worsen the competitive balance among teams in a professional sports league. If clubs are win maximizers, revenue sharing improves the competitive balance.
    Date: 2003–08
  5. By: Victor Matheson (Department of Economics, College of the Holy Cross)
    Abstract: Critics of economic impact studies that purport to show that mega-events such as the Olympics bring large benefits to the communities “lucky” enough to host them frequently cite the use of inappropriate multipliers as a primary reason why these impact studies overstate the true economic gains to the hosts of these events. This brief paper shows in a numerical example how mega-events may lead to inflated multipliers and exaggerated claims of economic benefits.
    Keywords: economic impact, sports, sport economics, mega-events
    JEL: L83
  6. By: Victor Matheson (Department of Economics, College of the Holy Cross); Robert Baade (Department of Economics and Business, Lake Forest College)
    Abstract: Civic boosters generally have estimated the Super Bowl to have an impact of $300 to $400 million on a host city’s economy. The National Football League has used the promise of an economic windfall to convince skeptical cities that investments in new stadiums for their teams in exchange for the right to host the event makes economic sense. Evidence from host cities from 1970-2001 indicates the Super Bowl contributes approximately one-quarter of what the boosters have promised and that the game could not have contributed by any reasonable standard of statistical significance, more than $300 million to host economies.
    Keywords: football, impact analysis, Super Bowl, sports, mega-event
    JEL: L83 R53
  7. By: Victor Matheson (Department of Economics, College of the Holy Cross); Robert Baade (Department of Economics and Business, Lake Forest College)
    Abstract: Supporters of mega-sporting events such as the World Cup and Olympics claim that these events attract hoards of wealthy visitors and lead to lasting economic benefits for the host regions. Developing countries have become increasingly vocal in demanding a share of the economic benefits of these international games. The specialized infrastructure and operating expenses required to host these events, however, can be substantial. Independent researchers have found that boosters’ projections of the economic impact of sporting events exaggerate the true economic impact of these competitions, and these events are an even worse investment for developing countries than for industrialized nations.
    Keywords: development, football, impact analysis, World Bup, sports, mega-event
    JEL: L83 R53 O2
  8. By: Victor Matheson (Department of Economics, College of the Holy Cross)
    Abstract: Previous research has concluded that the 1981 and 1994/95 Major League Baseball (MLB) strikes have caused short-term losses in attendance but have not resulted in any long-term effects on attendance. While total attendance at MLB games following the 1994/95 strike has recovered to its pre-strike levels, this has been done only through the construction of new stadiums at an unprecedented pace which cannot continue into the future. After accounting for stadium effects, average MLB baseball attendance has dropped significantly since the 1994/95 strike.
    Keywords: baseball, strikes, sports, attendance
    JEL: D12 J52 L83
    Date: 2004–10
  9. By: Victor Matheson (Department of Economics, College of the Holy Cross)
    Abstract: In a recent article in Economic Development Quarterly, "Comparative Economic Impact Analyses: Differences Across Cities, Events, and Demographics" (November 2004), Michael Mondello and Patrick Rishe examined the economic impact of small, amateur sporting events on host economies. This response to their work suggests four reasons why ex ante economic impact estimates for smaller sporting events may come closer to matching ex post reality than those for "mega-events" including less crowding out, lower hosting costs, higher multipliers, and less incentive for boosters to published inflated figures.
    Keywords: economic impact, sports, sport economics, mega-events
    JEL: L83
    Date: 2004–11

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