nep-spo New Economics Papers
on Sports and Economics
Issue of 2016‒03‒10
three papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. A comment on the newly revised “2015 version” of the UEFA Club Licensing and Financial Fair Play Regulations By Egon Franck
  2. Making the Rules of Sports Fairer By Brams, Steven J.; Ismail, Mehmet S.
  3. Hierarchical Organization and Performance Inequality: Evidence from Professional Cycling By Bertrand Candelon; Arnaud Dupuy

  1. By: Egon Franck (Department of Business Administration, University of Zurich)
    Abstract: UEFA has revised its Club Licensing and Financial Fair Play Regulations in June 2015 (new FFP). Based on a conceptual analysis of the main components of new FFP – the Break-Even Requirement (BER), the Fair Market Value Principle (FVP) and the concept of Voluntary Agreements (VA) – this comment arrives to the following main conclusions: New FFP follows old FFP in creating hard budget constraints for football managers and in discriminating against “payroll gifts” and therefore against benefactors that are willing to inject money in exchange for “pure” sporting success. But new FFP is now less vulnerable to the allegation that it discriminates against true entrepreneurs wishing to develop mismanaged football clubs into sustainable businesses. The new concept of Voluntary Agreements (VA)gives them more flexibility to invest, particularly in such environments where quality is only slowly remunerated by the football markets.
    Keywords: House money effect, Prospect theory, Natural experiment, Casino gambling
    JEL: D80 D81
    Date: 2016–02
  2. By: Brams, Steven J.; Ismail, Mehmet S.
    Abstract: The rules of many sports are not fair—they do not ensure that equally skilled competitors have the same probability of winning. As an example, the penalty shootout in soccer, wherein a coin toss determines which team kicks first on all five penalty kicks, gives a substantial advantage to the first-kicking team, both in theory and practice. We show that a so-called Catch-Up Rule for determining the order of kicking would not only make the shootout fairer but also is essentially strategyproof. By contrast, the so-called Standard Rule now used for the tiebreaker in tennis is fair. We briefly consider several other sports, all of which involve scoring a sufficient number of points to win, and show how they could benefit from certain rule changes, which would be straightforward to implement.
    Keywords: Sports rules, fairness, strategyproofness, Markov process, soccer, tennis
    JEL: C6 C61 C7 D6 D63
    Date: 2016–02
  3. By: Bertrand Candelon; Arnaud Dupuy
    Date: 2016–02–18

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