nep-spo New Economics Papers
on Sports and Economics
Issue of 2014‒10‒03
three papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Salary Inequality, Team Success and the Superstar Effect By Philippe Cyrenne
  2. Probabilistic Transitivity in Sports By Johannes Tiwisina; Philipp Kuelpmann
  3. On Doping and Recovery By Sebastian Bervoets; Bruno Decreuse; Mathieu Faure

  1. By: Philippe Cyrenne
    Abstract: In this paper, I examine the relationship between a professional sports team's salary distribution and its performance. I first develop a simple model of a team's salary distribution and then using data from the period covered by the recent Collective Bargaining Agreement between players and owners in the National Hockey League, I examine the relationship between a team's salary distribution and its winning percentage. Using a variety of estimators and a variety of measures to describe the distribution of player salaries on a team, I find that teams with higher relative payrolls and lower salary inequality have higher winning percentages. I also find evidence of a superstar effect, in that teams with a higher maximum player salary have higher winning percentages. The results are sensitive; however, to the particular measure of salary inequality used and the endogeneity of the salary distribution.
    Date: 2014–09
  2. By: Johannes Tiwisina (Center for Mathematical Economics, Bielefeld University); Philipp Kuelpmann (Center for Mathematical Economics, Bielefeld University)
    Abstract: We seek to find the statistical model that most accurately describes empirically observed results in sports. The idea of a transitive relation concerning the team strengths is implemented by imposing a set of constraints on the outcome probabilities. We theoretically investigate the resulting optimization problem and draw comparisons to similar problems from the existing literature including the linear ordering problem and the isotonic regression problem. Our optimization problem turns out to be very complicated to solve. We propose a branch and bound algorithm for an exact solution and for larger sets of teams a heuristic method for quickly finding a "good" solution. Finally we apply the described methods to panel data from soccer, American football and tennis and also use our framework to compare the performance of empirically applied ranking schemes.
    Keywords: stochastic transitivity, trinomial, geometric optimization, ranking, branch and bound, linear ordering problem, ELO, tabu search, football, soccer, tennis, bundesliga, NFL, ATP
    JEL: L83 C61 C63 C81
    Date: 2014–08
  3. By: Sebastian Bervoets (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)); Bruno Decreuse (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)); Mathieu Faure (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM))
    Abstract: This paper provides a game-theoretical analysis of the use by athletes of performance-enhancing drugs. We focus on a two-player game where players are heterogeneous and performances are subject to uncertainty. While the standard setup assumes these drugs increase maximum performances, we assume that they also increase the probability that a given athlete competes at his best possible level. This second effect drives the doping strategies alone, suggesting that focusing on the first effect leads to incorrect conclusions. Doping strategies are strategic complements for the top dog, whereas they are strategic substitutes for the underdog. We show that the top dog always dopes more than the underdog, and that the top dog will often prefer a world with doping than without it. We also argue that anti-doping tests may increase doping for the underdog, and that targeting such tests to the top dog provides incentive to dope for the underdog.
    Keywords: game theory; PED; anti-doping legislation
    Date: 2014–08

This nep-spo issue is ©2014 by João Carlos Correia Leitão. 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.