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Competitive Balance in the NBA Playoffs

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  • Ira Horowitz

Abstract

The uncertainty-of-outcome hypothesis suggests that, subject to a rooting-interest constraint, fans prefer competitive sporting events with uncertain outcomes. In a logical extension of that preference, professional-sports leagues institute rules, such as reverse-order-of-finish drafts and salary caps, intended to help achieve competitive balance among their franchises. This article analyzes the results of the 34 National Basketball Association (NBA) playoffs held since 1984 to determine whether they reflect the competitive imbalance observed for regular-season play, relying on the entropy concept as a measure of uncertainty/information content to do so. It is shown that unlike regular-season competitive balance, playoff entropy has not systematically changed over time. JEL Classifications : D47, D84, Z20, Z21

Suggested Citation

  • Ira Horowitz, 2018. "Competitive Balance in the NBA Playoffs," The American Economist, Sage Publications, vol. 63(2), pages 215-227, October.
    • Handle: RePEc:sae:amerec:v:63:y:2018:i:2:p:215-227
    DOI: 10.1177/0569434517747250
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    References listed on IDEAS

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    More about this item

    Keywords

    National Basketball Association; playoffs; entropy; competitive balance; uncertainty-of-outcome hypothesis;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • Z20 - Other Special Topics - - Sports Economics - - - General
    • Z21 - Other Special Topics - - Sports Economics - - - Industry Studies

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