2013-05-11 papers

on Sports and Economics

Issue of 2013–05–11
one paper chosen by
Humberto Barreto, DePauw University

Who Should Pay the Sports Agent’s Commission? An Economic Analysis of Setting the Legal Rules in the Regulation of Matchmakers By Brocard, Jean-François; Cavagnac, Michel

Who Should Pay the Sports Agent’s Commission? An Economic Analysis of Setting the Legal Rules in the Regulation of Matchmakers

By:	Brocard, Jean-François (CDES); Cavagnac, Michel (University of Limoges, TSE)
Abstract:	We study the effects of completing the legal framework of matchmakers with a rule designating which party must pay the commission. The paper examines the two rules currently open to debate at the international level in sport: the "player-pays" principle and the "club-pays" principle. We find that the most appropriate measure entails designating the party with the lesser bargaining power to pay the intermediary’s fee. However, our main result indicates that the appropriateness of imposing an additional rule in the legal framework is a preliminary issue. Indeed, even if the best rule is chosen, welfare may be decreased by this legal initiative.
JEL:	C78 D83 K23
Date:	2012–07
URL:	https://d.repec.org/n?u=RePEc:tse:wpaper:27145

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