nep-spo New Economics Papers
on Sports and Economics
Issue of 2012‒10‒27
two papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Competition Between Sports Leagues: Theory and Evidence on Rival League Formation in North America By Che, XiaoGang; Humphreys, Brad
  2. Earnings and Performance in Women's Professional Alpine Skiing By Che, XiaoGang; Humphreys, Brad

  1. By: Che, XiaoGang (University of Alberta, Department of Economics); Humphreys, Brad (University of Alberta, Department of Economics)
    Abstract: We analyze the formation of rival leagues in professional team sports, one of the least studied forms of competition in sport. We survey the economic history of professional sports leagues in North America and develop stylized facts about rival league formation and develop a game-theoretic model of entry of a rival league to an existing market to explain these stylized facts. This model accounts for the strategic interaction between the incumbent and rival league and costs associated with acquiring new players from the incumbent league. The model predicts that either expanding to deter rival league formation, or allowing a rival league to form and then merging with that league is a subgame perfect equilibrium, and that incumbent leagues will pay players relatively high salaries to deter entry by a rival league.
    Keywords: professional team sports; rival league; monopsony
    JEL: D42 L12 L83
    Date: 2012–10–01
  2. By: Che, XiaoGang (University of Alberta, Department of Economics); Humphreys, Brad (University of Alberta, Department of Economics)
    Abstract: We test the predictions of tournament theory using data from competitions in the FIS Alpine Skiing World Cup. Based on data from more than 60 Giant Slalom and Downhill events held over the period 2001-2010, female professional Alpine skiers respond to tournament incentives; times in both events were faster in events with a larger spread in the prize distribution when controlling for course characteristics and the number of contestants in the race. In this setting women engage in vigorous competition in response to monetary incentives.
    Keywords: tournament theory; womens professional skiing
    JEL: J22 J33 L83
    Date: 2012–10–01

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