The article models the upset—a low-probability outcome of a periodic competition. It is assumed that the upset is an independent component of consumer preferences, whose marginal willingness to pay grows with time. The decision rule for a league on upset timing is a competitive-balance problem but is unlike standard models of competitive balance. Upset timing is likened partially to the optimal redemption time of a growing asset, and implications for competitive balance in this environment are derived.
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Article provided by in its journal Journal of Sports Economics
Volume (Year): 13 (2012)Handle:
Issue (Month): 3 (June)
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Related researchKeywords: upsets
; competitive balance
; sports demand
; duration model
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