A Quality-of-Play Model of a Professional Sports League
AbstractAssuming that consumers value both the absolute and relative quality of play, I compare the choice of ticket prices, team qualities, and number of games played in a noncooperative outcome versus that chosen by a social planner. I find that the nature of consumer preferences regarding the quality of play determines whether the demand for talented players are strategic complements or substitutes. A strong preference by fans for a superior team makes players strategic substitutes, and a concern for a high quality of play and competitive balance make players strategic complements. Moreover, when fans only value the relative quality of play, there is an overemployment of talented players in the noncooperative outcome versus the socially optimal outcome; when they only value the absolute quality of play then there is an underemployment of talented players in the noncooperative outcome. Copyright 2001 by Oxford University Press.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 39 (2001)
Issue (Month): 3 (July)
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Other versions of this item:
- Cyrenne, Philippe, 2001. "A Quality of Play Model of a Professional Sports League," MPRA Paper 29060, University Library of Munich, Germany.
- L0 - Industrial Organization - - General
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
- D4 - Microeconomics - - Market Structure and Pricing
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