Game Theoretic Analysis of Basic Team Sports Leagues
AbstractThe article proposes a new “strategic market game” (SMG) approach to modeling strategic interactions between clubs in professional team sports leagues, and generalizes a basic framework used in previous literature (two clubs, fixed talent supply and club revenues that depend only on relative team qualities), to allow variable talent supply and club revenues that depend on absolute (and relative) team qualities. The new approach incorporates club talent market power (duopsony), overlooked by existing approaches; in both the basic and the more general framework, Nash equilibrium competitive balance is analyzed, with and without revenue sharing and with comparisons to existing analyses.
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Bibliographic InfoArticle provided by in its journal Journal of Sports Economics.
Volume (Year): 12 (2011)
Issue (Month): 4 (August)
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- Madden, Paul, 2012. "Fan welfare maximization as a club objective in a professional sports league," European Economic Review, Elsevier, vol. 56(3), pages 560-578.
- Che, XiaoGang & Humphreys, Brad, 2012. "Competition Between Sports Leagues: Theory and Evidence on Rival League Formation in North America," Working Papers 2012-23, University of Alberta, Department of Economics.
- Paul Madden & Mario Pezzino, 2013. "Sports League Quality, Broadcaster TV Rights Bids and Wholesale Regulation of Sports Channels," The School of Economics Discussion Paper Series 1304, Economics, The University of Manchester.
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