nep-spo New Economics Papers
on Sports and Economics
Issue of 2017‒12‒03
four papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Four cases in sports competition policy: Baseball, judo, football, and motor racing By Budzinski, Oliver
  2. Market-internal financial regulation in sports as an anticompetitive institution By Budzinski, Oliver
  3. Sequential round-robin tournaments with multiple prizes By Laica, Christoph; Lauber, Arne; Sahm, Marco
  4. Does Confidence Enhance Performance? Causal Evidence from Professional Biathlon By Alexander Ahammer; Mario Lackner; Jasmin Voigt

  1. By: Budzinski, Oliver
    Abstract: Practices and conducts in professional and even amateur sports can be subject to competition laws as soon as commercial activities are involved. From an economic perspective, this implies that both directly commercial activities like the sale of broadcasting/media rights and indirectly commercial activities like defining and enforcing the rules of the games can be hit by competition policy interventions. Setting and enforcing the rules of the game is an activity with commercial effects because it influences attractiveness and marketability of the sports in question. After discussing fundamental issues, this contributions reviews selected landmark cases in sports competition policy from an economic perspective. This includes the U.S. baseball antitrust exemption, access rules to Judo tournaments, sale systems of media rights in European football as well as a unique combination of long-run exclusivity contracts, skewed allocation of common revenues, and special influences on rule-setting by some competitors in Formula One motor racing. Eventually, the areas of state aid to football clubs and mergers in Danish football are sketched.
    Keywords: sports economics,antitrust,competition policy,baseball,judo,football,soccer,motor racing,formula one,media rights,sports broadcasting,competitive balance,cartels,abuse of dominance
    JEL: K21 L40 L83 L82
    Date: 2017
  2. By: Budzinski, Oliver
    Abstract: Financial regulation in sports is usually discussed in the context of representing an instrument against "financial doping". Notwithstanding the merits of this discussion, this paper takes the opposite perspective and analyses how market-internal financial regulation itself may anticompetitively influence sporting results. Virtually every regulative financial intervention distorts sporting competition to some extent and creates beneficiaries and losers. Sometimes, the actual winners and losers of financial regulation stand in line with the (legitimate) goals of the regulation like limiting financial imbalances or preventing distortive midseason insolvencies of teams. However, financial regulation may also display unintended side-effects like protecting hitherto successful teams from new challengers, cementing the competitive order, creating foreclosure and entry barriers, or serving vested interests of powerful parties. All of these effects may also be hidden agendas by those who are implementing and enforcing market-internal financial regulation or influencing it. This paper analyses various types of budget caps (including salary caps) with respect to potentially anticompetitive effects. UEFA's so-called Financial Fair Play Regulations are highlighted as an example. Furthermore, the paper discusses allocation schemes of common revenues (like from the collective sale of broadcasting rights) as another area of financial regulation with potentially anticompetitive effects. Eventually, the effects of standards for accounting, financial management, and auditing are discussed.
    Keywords: sports economics,financial regulation,budget caps,salary caps,financial fair play,financial doping,collective sale of media rights,sports broadcasting rights,revenue sharing
    JEL: L40 L83 K21
    Date: 2017
  3. By: Laica, Christoph; Lauber, Arne; Sahm, Marco
    Abstract: We examine the fairness and intensity of sequential round-robin tournaments with multiple prizes. With three symmetric players and two prizes, the tournament is completely fair if and only if the second prize is valued half of the first prize, regardless of whether matches are organized as Tullock contests or as allpay auctions. For second prizes different from half of the first prize, three-player tournaments with matches organized as Tullock contests are usually fairer than tournaments with matches organized as all-pay auctions. However, unless the second prize is very small, they are less intense in the sense that players exert less ex-ante expected aggregate effort per unit of prize money. Moreover, we specify how the relative size of the second prize influences the extent and the direction of discrimination as well as the intensity of three-player tournaments. Finally, we show that there is no prize structure for which sequential round-robin tournaments with four symmetric players are completely fair in general.
    Keywords: Round-Robin Tournament,Multiple Prizes,Fairness,Intensity,Tullock Contest,All-Pay Auction
    JEL: C72 D72
    Date: 2017
  4. By: Alexander Ahammer; Mario Lackner; Jasmin Voigt (Department of Economics, Johannes Kepler University Linz, Austria)
    Abstract: We analyze the e ect of self-confidence on performance using data from top-level professional biathlon competitions. Biathlon combines two independent tasks: cross-country skiing and rifle shooting. We exploit this dual nature of the sport by using weather conditions affecting performance on the skiing track as exogenous variation in confidence on the shooting range. Using round-level data on 254 competitions between 2009 and 2013, we show that the less confident athletes are, the worse their performance is on the shooting range. In particular, we estimate an increase of 0.525 standard deviations in missed shots for every standard deviation increase in our inverse self-confidence measure. E ects for women are estimated to be generally smaller in magnitude and less robust.
    Keywords: Self-confidence, performance, biathlon, sports economics.
    JEL: J24
    Date: 2017–11

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