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on Sports and Economics |
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Issue of 2009‒12‒11
two papers chosen by Joao Carlos Correia Leitao Polytechnic Institute of Portalegre and Technical University of Lisbon |
| By: | Helmut Dietl (Institute for Strategy and Business Economics, University of Zurich); Martin Grossmann (Institute for Strategy and Business Economics, University of Zurich); Markus Lang (Institute for Strategy and Business Economics, University of Zurich) |
| Abstract: | This paper develops a contest model of a professional sports league in which clubs maximize a weighted sum of profits and wins (utility maximization). The model analyzes how more win-orientated behavior of certain clubs affects talent investments, competitive balance and club profits. Moreover, in contrast to traditional models, we show that revenue sharing does not always reduce investment incentives due to the dulling effect. We identify a new effect of revenue sharing called the "sharpening effect". In the presence of the sharpening effect (dulling effect), revenue sharing enhances (reduces) investment incentives and improves (deteriorates) competitive balance in the league. |
| Keywords: | Competitive balance, contest, invariance proposition, objective function, revenue sharing, team sports league, utility maximization |
| JEL: | L83 D43 C72 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iso:wpaper:0118&r=spo |
| By: | Bridgewater, Sue (University of Warwick); Kahn, Lawrence M. (Cornell University); Goodall, Amanda H. (University of Warwick) |
| Abstract: | We use data on British football managers and teams over the 1994-2007 period to study substitution and complementarity between leaders and subordinates. We find for the Premier League (the highest level of competition) that, other things being equal, managers who themselves played at a higher level raise the productivity of less-skilled teams by more than that of highly skilled teams. This is consistent with the hypothesis that one function of a top manager is to communicate to subordinates the skills needed to succeed, since less skilled players have more to learn. We also find that managers with more accumulated professional managing experience raise the productivity of talented players by more than that of less-talented players. This is consistent with the hypothesis that a further function of successful managers in high-performance workplaces is to manage the egos of elite workers. Such a function is likely more important the more accomplished the workers are – as indicated, in our data, by teams with greater payrolls. |
| Keywords: | productivity, leadership |
| JEL: | J24 M51 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4589&r=spo |