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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title The effect of marginal cost elasticity on competitive balance
Organization Unit
Authors
  • Helmut Max Dietl
  • M Grossmann
  • U Trinkner
Item Subtype Original Work
Refereed Yes
Status Published in final form
Language
  • English
Journal Title Journal of Sports Economics
Publisher Sage Publications
Geographical Reach international
ISSN 1527-0025
Volume 9
Number 4
Page Range 339 - 350
Date 2008
Abstract Text This article presents a model of talent investments where two clubs compete for prizes. Our model is based on a general class of cost functions with a constant elasticity of marginal costs with respect to investments. The analysis finds that reduced revenue sharing improves competitive balance. Furthermore, we show that a higher elasticity of marginal costs with respect to investments enhances competitive balance and simultaneously reduces the negative effect of revenue sharing on competitive balance.
Digital Object Identifier 10.1177/1527002507310959
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