nep-spo New Economics Papers
on Sports and Economics
Issue of 2006‒10‒14
five papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. The Champions League and the Coase Theorem By Stefan Szymanski
  2. Competitive balance in sports leagues and the paradox of power By Stefan Szymanski
  3. Tilting the Playing Field (Why a sports league planner would choose less, not more, competitive balance): The case of English Football By Stefan Szymanski; Stephanie Leach
  4. Team Performance in UEFA Champions League 2005-06 By Papahristodoulou, Christos
  5. Goal! Profit maximization and win maximization in football leagues By Pedro Garcia-del-Barrio; Stefan Szymanski

  1. By: Stefan Szymanski (Tanaka Business School, Imperial College)
    Abstract: The Coase Theorem is both one of the simplest and most profound ideas in economics. Coase’s insight was first expressed in print as a theorem by George Stigler, following the publication of the famous article “The Problem of Social Cost” by Nobel Laureate Ronald Coase (1960). Stigler stated it thus: “with zero transactions costs, private and social costs will be equal”. In this paper the Coase Theorem is approached through the medium of a sports league. While Coase’s article dates from 1960, a colleague at Chicago University published a discussion of the market for baseball players in 1956 which almost completely anticipates the more famous paper (Rottenberg (1956)).
    Keywords: Coase
    JEL: L83
    Date: 2006–10
  2. By: Stefan Szymanski (Tanaka Business School, Imperial College)
    Abstract: It is generally thought that competitive equilibrium in sports leagues involves too little competitive balance (the strong dominate the weak too much- a more even contest would be more attractive). However, it is possible to sow in a standard logit contest model that the reverse is true – the strong do not win “enough”- i.e. more wins by the strong team would increase attendance or revenues. This is consistent with Hirshleifer’s paradox of power. However, this is only true so long as the strong do not become too dominant- otherwise the regime switches to one of pre-emption: the strong never lose. This paper identifies the conditions under which the paradox of power and pre-emption will manifest themselves.
    JEL: L83
    Date: 2006–10
  3. By: Stefan Szymanski (Tanaka Business School, Imperial College); Stephanie Leach (Tanaka Business School, Imperial College)
    Abstract: It has traditionally been argued that the organizer of a sports league would prefer more competitive balance to the level that emerges in a noncooperative equilibrium. This argument has been used to justify restraints on competition between teams, which also tend to raise profits at the expense of players and consumers. This paper shows that in theory a planner would prefer less, not more, competitive balance. The paper uses data from the second tier of professional English league football to show just how unbalanced a league planner would choose.
    Keywords: competitive balance, sports leagues, football, soccer
    JEL: D71 L25 L41 L83
    Date: 2006–10
  4. By: Papahristodoulou, Christos
    Abstract: This study uses a multi-output multi-input Data Efficiency Analysis (DEA) to estimate the performance of all thirty-two participated football teams in the UEFA Champions League (CL) tournament 2005-06. The estimates are based on official match statistics from all 125 matches.
    Keywords: team; performance; efficiency; goals; points
    JEL: L83 Z0
    Date: 2006–09–05
  5. By: Pedro Garcia-del-Barrio (Universidad Internacional de Cataluna; Universidad Pompeu-Fabra); Stefan Szymanski (Tanaka Business School, Imperial College)
    Abstract: In this paper we estimate the best responses of football clubs to the choices of other clubs in Spanish and English leagues over the period 1994-2004. We find that choices are more closely approximated by win maximization than by profit maximization in both the short term and the long term. We examine club characteristics that might explain variations in choices between Spanish clubs.
    Keywords: soccer, football
    JEL: L83
    Date: 2006–10

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