Cities and Professional Sports Teams: A Dynamic Bargaining Model
AbstractWe investigate the phenomenon in which professional sports teams receive subsidies from cities to induce them to remain in the city. These subsidies often take the form of public funding for a new stadium. Using a dynamic model of bargaining with asymmetric threat points, we show that teams can extract increasing concessions from the city, culminating with the partial public funding of a new stadium. The model is consistent with many observed city/team bargaining relationships where lease renegotiations often favor the team over the city as teams use the threat of relocation as leverage in negotiations.
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Bibliographic InfoArticle provided by Fitness Information Technology in its journal International Journal of Sport Finance.
Volume (Year): 2 (2007)
Issue (Month): 2 (May)
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- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
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- Humphreys, Brad & Zhou, Li, 2014.
"Loss Aversion, Team Relocations, and Major League Expansion,"
2014-3, University of Alberta, Department of Economics.
- Brad R. Humphreys & Li Zhou, 2014. "Loss Aversion, Team Relocations, and Major League Expansion," Working Papers 14-17, Department of Economics, West Virginia University.
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