nep-spo New Economics Papers
on Sports and Economics
Issue of 2022‒10‒10
six papers chosen by
Humberto Barreto
DePauw University

  1. Home advantage and mispricing in indoor sports’ ghost games: the case of European basketball By Luca De Angelis; J. James Reade
  2. Fading Shooting Stars – The Relative Age Effect, Misallocation of Talent, and Returns to Training in German Elite Youth Soccer By Lukas Tohoff; Mario Mechtel
  3. International Assortative Matching in the European Labor Market By Peeters, Thomas; van Ours, Jan C.
  4. Trickle-Down Effects of Affirmative Action: A Case Study in France By José De Sousa; Muriel Niederle
  5. The Emergence of League and Sub-League Structure in the Population Lotto Game By Giovanni Artiglio; Aiden Youkhana; Joel Nishimura
  6. Strategic investments in multi-stage General Lotto games By Rahul Chandan; Keith Paarporn; Mahnoosh Alizadeh; Jason R. Marden

  1. By: Luca De Angelis (Department of Economics, University of Bologna); J. James Reade (Department of Economics, University of Reading)
    Abstract: Several recent studies suggest that the home advantage, that is, the benefit competitors accrue from performing in familiar surroundings, was — at least temporarily — reduced in games played without spectators during the COVID-19 Pandemic. These games played without fans during the Pandemic have been dubbed ‘ghost games’. However, the majority of the research to date focuses on soccer and no contributions have been provided for indoor sports, where the effect of the support of the fans might have a stronger impact than in outdoor arenas. In this paper, we fill this gap by investigating the effect of ghost games in basketball. In particular, we test (i) for the reduction of the home advantage in basketball, (ii) whether such reduction tends to disappear over time, (iii) if the bookmakers promptly adapt to such structural change or whether mispricing was created on the betting market. The results from a large data set covering all seasons since 2004 for the ten most popular basketball leagues in Europe show an overall significant reduction of the home advantage of around 5% and no evidence that suggests that this effect has been reduced at as teams became more accustomed to playing without fans. At the same time, bookmakers appear to have anticipated such an effect and priced home wins in basketball matches accordingly, thus avoiding any mispricing on betting markets.
    Keywords: Sports forecasting, Market efficiency, Home advantage, Betting markets, COVID-19
    JEL: Z2
    Date: 2022–07–01
  2. By: Lukas Tohoff (Bocconi University, Economics and Social Sciences); Mario Mechtel (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre)
    Abstract: This paper analyses the Relative Age Effect (RAE) in German elite youth soccer academies. We examine the efficiency of talent selection and the returns to training. Our results indicate a strong effect of players’ birth dates on their probability of getting selected – and, thus, a waste of talent. Using data on 2,382 former elite youth players and their later market values, we find that clubs could generate 30.3 to 77.2% higher market values when eliminating the RAE. Our findings emphasize that distinguishing between current and potential performance levels is crucial for the efficient allocation of talent in sports and society
    Keywords: Relative age effect, market values, misallocation of talent, returns to training, selection of talent, elite youth soccer
    JEL: J24 Z22 M51 M53 I24 I26 D71
    Date: 2022–09
  3. By: Peeters, Thomas (Erasmus University Rotterdam); van Ours, Jan C. (Erasmus University Rotterdam)
    Abstract: We investigate whether national borders within Europe hinder the assortative matching of workers to firms in a high skilled labor market. We characterize worker productivity as the ability to contribute to physical output and define firm productivity as the capacity to transform physical output into revenues. We rank workers and firms according to their individual productivity estimates and study the ensuing rank correlation to gauge the degree of assortative matching within and across countries. We find strong evidence for positive assortative matching at the national level, and even more so at the international level. This suggests national borders do not prevent workers and firm from pursuing profitable complementarities in production.
    Keywords: assortative matching, international worker mobility, football managers
    JEL: M51 J63 J24 Z22
    Date: 2022–08
  4. By: José De Sousa; Muriel Niederle
    Abstract: The introduction of a quota in the French chess Club Championship in 1990, an activity many players engage in next to playing in individual tournaments, provides a quite unique environment to study its effects on three levels. We find that women selected by the quota improve their performance. We show large spillover and trickle-down effects: There are more and better qualified women. International comparisons confirm that the results are unique to France and that there are no substantial adverse effects on French male players. We discuss the properties of this quota and how to implement it in other environments.
    JEL: J16
    Date: 2022–08
  5. By: Giovanni Artiglio; Aiden Youkhana; Joel Nishimura
    Abstract: In order to understand if and how strategic resource allocation can constrain the structure of pair-wise competition outcomes in competitive human competitions we introduce a new multiplayer resource allocation game, the Population Lotto Game. This new game allows agents to allocate their resources across a continuum of possible specializations. While this game allows non-transitive cycles between players, we show that the Nash equilibrium of the game also forms a hierarchical structure between discrete `leagues' based on their different resource budgets, with potential sub-league structure and/or non-transitive cycles inside individual leagues. We provide an algorithm that can find a particular Nash equilibrium for any finite set of discrete sub-population sizes and budgets. Further, our algorithm finds the unique Nash equilibrium that remains stable for the subset of players with budgets below any threshold.
    Date: 2022–08
  6. By: Rahul Chandan; Keith Paarporn; Mahnoosh Alizadeh; Jason R. Marden
    Abstract: In adversarial interactions, one is often required to make strategic decisions over multiple periods of time, wherein decisions made earlier impact a player's competitive standing as well as how choices are made in later stages. In this paper, we study such scenarios in the context of General Lotto games, which models the competitive allocation of resources over multiple battlefields between two players. We propose a two-stage formulation where one of the players has reserved resources that can be strategically pre-allocated across the battlefields in the first stage. The pre-allocation then becomes binding and is revealed to the other player. In the second stage, the players engage by simultaneously allocating their real-time resources against each other. The main contribution in this paper provides complete characterizations of equilibrium payoffs in the two-stage game, revealing the interplay between performance and the amount of resources expended in each stage of the game. We find that real-time resources are at least twice as effective as pre-allocated resources. We then determine the player's optimal investment when there are linear costs associated with purchasing each type of resource before play begins, and there is a limited monetary budget.
    Date: 2022–09

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