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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Competitive balance and revenue sharing in sports leagues with utility-maximizing teams |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Sports Economics |
| Publisher | Sage Publications |
| Geographical Reach | international |
| ISSN | 1527-0025 |
| Volume | 12 |
| Number | 3 |
| Page Range | 284 - 308 |
| Date | 2011 |
| Abstract Text | This paper develops a contest model of a professional sports league in which clubs maximize a weighted sum of profits and wins (utility maximization). The model analyzes how more win-oriented behavior of certain clubs affects talent investments, competitive balance, and club profits. Moreover, in contrast to traditional models, the authors show that revenue sharing does not always reduce investment incentives due to the dulling effect. The authors identify a new effect of revenue sharing called the ‘‘sharpening effect.’’ In the presence of the sharpening effect (dulling effect), revenue sharing enhances (reduces) investment incentives and improves (deteriorates) competitive balance in the league. |
| Digital Object Identifier | 10.1177/1527002511404787 |
| Other Identification Number | merlin-id:4269 |
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| Additional Information | Copyright: Sage Publications, Inc. |