nep-spo New Economics Papers
on Sports and Economics
Issue of 2010‒04‒17
seven papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Gametheoretic analysis of basic team sports leagues By Paul Madden
  2. The regulation of a large sports league By Paul Madden
  3. Organizational Differences between U.S. Major Leagues and European Leagues: Implications for Salary Caps By Helmut Dietl; Egon Franck; Markus Lang; Alexander Rathke
  4. Family Violence and Football: The Effect of Unexpected Emotional Cues on Violent Behavior By Card, David; Dahl, Gordon B.
  5. Consumption Benefits and Gambling: Evidence From the NCAA Basketball Betting Market By Humphreys, Brad; Paul, Rodney; Weinbach, Andrew
  6. Incentive Effects in Asymmetric Tournaments - Empirical Evidence from the German Hockey League By Petra Nieken; Michael Stegh
  7. Sectoral Labour Market Effects of the 2006 FIFA World Cup By Arne Feddersen; Wolfgang Maennig

  1. By: Paul Madden
    Date: 2010
  2. By: Paul Madden
    Date: 2010
  3. By: Helmut Dietl (Institute for Strategy and Business Economics, University of Zurich); Egon Franck (Institute for Strategy and Business Economics, University of Zurich); Markus Lang (Institute for Strategy and Business Economics, University of Zurich); Alexander Rathke (Institute for Empirical Research in Economics, University of Zurich)
    Abstract: This paper outlines and compares the organizational structure of major sports leagues, explores the reasoning behind their formation, and derives implications for salary caps in European football. To understand why sports leagues have developed a specific organizational structure, one must take the economic peculiarities of team sports leagues into consideration. For this purpose, we analyze the production process and illuminate its major peculiarities. For example, we present the difference between economic competition and competition on the pitch and discuss the consequences of this distinction for an attractive final product. Furthermore, we show that a hold-up problem exists between the two stages of the production process and demonstrate how these problems are overcome by the organizational structure chosen by sports leagues. We also outline the differences between the U.S. major leagues and European leagues and document recent developments in that context. Finally, based on this comparative institutional analysis, we derive implications for the introduction of salary caps into European football.
    Keywords: Sports leagues, organization, salary cap, hold-up problem
    JEL: L83
    Date: 2010–03
  4. By: Card, David (University of California, Berkeley); Dahl, Gordon B. (University of California, San Diego)
    Abstract: We study the link between family violence and the emotional cues associated with wins and losses by local professional football teams. We hypothesize that the risk of violence is affected by the 'gain-loss' utility of game outcomes around a rationally expected reference point. Our empirical analysis uses police reports of violent incidents on Sundays during the professional football season. Controlling for the pre-game point spread and the size of the local viewing audience, we find that upset losses (defeats when the home team was predicted to win by 4 or more points) lead to a 10 percent increase in the rate of at-home violence by men against their wives and girlfriends. In contrast, losses when the game was expected to be close have small and insignificant effects. Upset wins (when the home team was predicted to lose) also have little impact on violence, consistent with asymmetry in the gain-loss utility function. The rise in violence after an upset loss is concentrated in a narrow time window near the end of the game, and is larger for more important games. We find no evidence for reference point updating based on the halftime score.
    Keywords: reference dependence, gain-loss utility, intimate partner violence
    JEL: J12
    Date: 2010–04
  5. By: Humphreys, Brad (University of Alberta, Department of Economics); Paul, Rodney (St. Bonaventure University); Weinbach, Andrew (Coastal Carolina University)
    Abstract: The determinants of the total number of bets placed on games from three on-line sports books are analyzed for the 2008‐9 NCAA basketball season. Betting volume depends on television coverage, temporal factors, the quality of the teams, and the expected closeness of the contest. Our results support the notion that consumption benefits motivate gambling rather than financial gain. Preferences of bettors appear similar to those of sports fans, suggesting that modeling gamblers as wealth‐maximizing investors may not be appropriate, and supports the predictions of the model of gambling developed by Conlisk (1993).
    Keywords: gambling; sports betting; bet volume; consumption value
    JEL: G12 L83
    Date: 2010–03–01
  6. By: Petra Nieken (University of Bonn); Michael Stegh (University of Cologne)
    Abstract: Following tournament theory, incentives will be rather low if the contestants of a tournament are heterogeneous. We empirically test this prediction using a large dataset from the German Hockey League. Our results show that indeed the intensity of a game is lower if the teams are more heterogeneous. This effect can be observed for the game as a whole as well as for the ?rst and last third. When dividing the teams in the dataset into favorites and underdogs, we only observe a reduction of effort provision from favorite teams. As the number of games per team changes between different seasons, we can also investigate the effect of a changing spread between winner and loser prize. In line with theory, teams reduce effort if the spread declines. Interestingly, effort is also sensitive to the total number of teams in the league even if the price spread remains unchanged.
    Keywords: Tournaments, Heterogeneity, Incentives,Effort
    JEL: J33
    Date: 2010–01
  7. By: Arne Feddersen (Chair for Economic Policy, University of Hamburg); Wolfgang Maennig (Chair for Economic Policy, University of Hamburg)
    Abstract: Using the case of the 2006 FIFA World Cup, this study is the first to test the employment effects of a mega-sporting event on the basis of data that are both regional and sectoral. It is also the first study of sporting events to use a non-parametric test method. Earlier studies on the World Cup could not identify any employment effects. In contrast, we find a small but significant positive em-ployment effect on the hospitality sector and a negative effect on the construction sector. To our knowledge, this is the first time that such a crowding-out effect of public investment on the occasion of a mega-sporting event has been found in an empirical analysis.
    Keywords: FIFA, World Cup, Economic Impact, Ex-post Analysis, Sectoral Employment
    JEL: H54 R12 L83
    Date: 2010

This nep-spo issue is ©2010 by Joao Carlos Correia Leitao. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.