nep-spo New Economics Papers
on Sports and Economics
Issue of 2006‒06‒17
three papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Ten Do it Better, Do They? : An Empirical Analysis of an Old Football Myth By Marco Caliendo; Dubravko Radic
  2. Frequent News and Pure Signals: The Case of a Publicly Traded Football Club By Georg Stadtmann
  3. Selection Tournaments, Sabotage, and Participation By Johannes Münster

  1. By: Marco Caliendo; Dubravko Radic
    Abstract: In this paper we investigate how the expulsion of a player influences the out-come of a football match. Common sense implies a negative impact for the affected team. However, an old football myth suggests that such an expulsion might also be beneficial since it increases the team spirit as well as the efforts of the affected team. We make use of a unique dataset containing all games played in a World Cup Championship between 1930 and 2002 and follow a twofold econometric strategy: We start with a conditional maximum likelihood estimator which is independent of the relative strength of the teams before we extend this estimator to take the relative strength of the teams and the minute of the expulsion into account. Our results indicate that the scoring intensities of both teams do not differ after the expulsion. Conducting scenario analysis reveals that the impact of a red card depends on the minute of the expulsion and does not have an impact at all if given at the end of the first half or later.
    Keywords: Poisson process, (un)conditional likelihood, football, red card effect
    JEL: C40 Z00
    Date: 2006
  2. By: Georg Stadtmann (Department of Economics, WHU Koblenz; Institute for Development Strategies, Indiana University)
    Abstract: We use stock market data for Borussia Dortmund GmbH & Co. KGaA – one of the leading German football clubs – for an application of the news model. Due to the specific characteristics of the news generating process, the case of a publicly traded sport club is a very appropriate candidate for testing this model. By applying a traditional as well as a reversed news model we elaborate whether new information can explain subsequent changes in the stock price of Borussia Dortmund. We find that sport as well as corporate governance related variables are important drivers of the stock price.
    Keywords: News Model, Football Industry, Betting Odds, Stock Market
    JEL: G14 L83
    Date: 2006–06
  3. By: Johannes Münster (Free University Berlin and Social Science Research Center Berlin (WZB), Reichpietschufer 50, 10785 Berlin, Germany, Telephone: +49 30 25491 410, Fax: +49 30 25491 400, E-mail:
    Abstract: This paper studies sabotage in tournaments with at least three contestants, where the contestants know each other well. Every contestant has an incentive to direct sabotage specifically against his most dangerous rival. In equilibrium, contestants who choose a higher productive effort are sabotaged more heavily. This might explain findings from psychology, where victims of mobbing are sometimes found to be overachieving. Further, sabotage equalizes promotion chances. The effect is most pronounced if the production function is linear in sabotage, and the cost function depends only on the sum of all sabotage activities: in an interior equilibrium, who will win is a matter of chance, even when contestants differ a great deal in their abilities. This, in turn, has adverse consequences for who might want to participate in a tournament. Since better contestants anticipate that they will be sabotaged more strongly, it may happen that the most able stay out and the tournament selects one of the less able with probability one. I also study the case where some contestants are easy victims, i.e. easier to sabotage than others.
    Keywords: tournament, contest, sabotage, selection
    JEL: M51 J41 J29
    Date: 2006–04

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