Rule changes and competitive balance in Formula One motor racing
AbstractThis article provides an economic explanation of the frequent rule changes in the Formula One (F1) motor racing series. In a two-stage model, the FIA (the organizer of the F1) first decides whether to change the rules or not, and then the racing teams compete in a contest. It turns out that a rule change reduces the teams' performances, but also improves competitive balance between the teams. The rule change is implemented, if the FIA's revenue gain from the latter effect overcompensates the FIA's revenue loss from the former effect. We provide empirical evidence from F1 seasons in the period 1950 to 2005, which supports the main implications of the model.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 41 (2009)
Issue (Month): 23 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
Other versions of this item:
- Mastromarco, Camilla & Runkel, Marco, 2004. "Rule Changes and Competitive Balance in Formula One Motor Racing," Discussion Papers in Economics 386, University of Munich, Department of Economics.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marco Runkel, 2004.
"Optimal Contest Design When The Designer's Payoff Depends On Competitive Balance,"
Royal Economic Society Annual Conference 2004
156, Royal Economic Society.
- Marco Runkel, 2003. "Optimal Contest Design when the Designer’s Payoff Depends on Competitive Balance," CESifo Working Paper Series 1009, CESifo Group Munich.
- Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
- Dasgupta, Ani & Nti, Kofi O., 1998. "Designing an optimal contest," European Journal of Political Economy, Elsevier, vol. 14(4), pages 587-603, November.
- Craig A. Depken, II, 2002. "Free Agency and the Concentration of Player Talent in Major League Baseball," Journal of Sports Economics, , vol. 3(4), pages 335-353, November.
- Krauskopf, Thomas & Langen, Martin & Bünger, Björn, 2010. "The search for optimal competitive balance in formula one," CAWM Discussion Papers 38, Center of Applied Economic Research Münster (CAWM), University of Münster.
- Marco Di Domizio & Mattia Palombini, 2011. "Competitività orizzontale e verticale nel ciclismo professionistico: alcune riflessioni sul circuito pro tour," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 6(3), pages 35-54, Febbraio.
- Langen, Martin & Krauskopf, Thomas, 2010. "The election of a world champion," CAWM Discussion Papers 39, Center of Applied Economic Research Münster (CAWM), University of Münster.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.