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Increasing Downside or Outer Risk? The Challenge of Measuring Competitive Imbalance in Closed and Open Leagues

Author

Listed:
  • Jean-Pascal Gayant

    (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université)

  • Nicolas Le Pape

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

In two seminal articles, Menezes, Geiss, and Tressler (1980) and Menezes and Wang (2005) have defined the concepts of increases in downside and in outer risk. Such notions are useful to give intrinsic characterizations of the notions of prudence and temperance. In this article, we explore a new application about higher-order risk preferences: the measurement of competitive imbalance in sports leagues. We show that desirable properties for the measurement of imbalance are the inclination to any increase in downside risk in the context of closed leagues, and the aversion to any increase in outer risk in the context of open leagues.

Suggested Citation

  • Jean-Pascal Gayant & Nicolas Le Pape, 2017. "Increasing Downside or Outer Risk? The Challenge of Measuring Competitive Imbalance in Closed and Open Leagues," Post-Print halshs-01525393, HAL.
    • Handle: RePEc:hal:journl:halshs-01525393
    DOI: 10.1002/soej.12184
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    References listed on IDEAS

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    Cited by:

    1. Jean-Pascal Guironnet, 2018. "Incertitude de classement final et affluence en Ligue 1 française de football : une nouvelle approche," Revue d'économie politique, Dalloz, vol. 128(4), pages 641-666.
    2. Marc Dubois, 2020. "Dominance Criteria on Grids for Measuring Seasonal Competitive Imbalance in Sports Leagues," Working Papers hal-02617635, HAL.
    3. Dubois, Marc, 2022. "Dominance criteria on grids for measuring competitive balance in sports leagues," Mathematical Social Sciences, Elsevier, vol. 115(C), pages 1-10.

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    Keywords

    competitive imbalance; open league;

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