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How to account for changes in the size of Sports Leagues: The Iso Competitive Balance Curves

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  • Jean-Pascal Gayant

    (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), GAINS - Groupe d'Analyse des Itinéraires et Niveaux Salariaux - Université du Maine)

  • Nicolas Le Pape

    (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie)

Abstract

The issue of Competitive Balance is a central issue in the literature on the economics of professional sports. The basic idea is that the managers of professional sports leagues must maintain a certain level of competitive balance in their league if they want it to remain attractive (Rottenberg (1956), El Hodiri & Quirk (1971), Fort & Quirk (1995), Vrooman (1995), Kesenne (2000), ...). An important part of literature is also devoted to the mechanisms to restore a satisfactory level of competitive balance: salary caps, luxury taxes, draft rules, gate revenue sharing... Although some authors challenge the idea that a decrease in competitive balance necessarily leads to a weakening of fan interest (Szymanski (2001)), all agree on the need to measure adequately the balance. As mentioned by Zymbalist (2002), the most commonly used index is the standard deviation of win percentage. But other indexes can be used as the ratio of the actual to the idealized standard deviation of win percentages, the Gini coefficient of win percentages, the Hirshman-Herfindahl index of competitive balance, the Concentration Ratio, the ratio of the top to bottom win percentages, the index of dissimilarity...

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Paper provided by HAL in its series Working Papers with number halshs-00856122.

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Date of creation: Jan 2012
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Handle: RePEc:hal:wpaper:halshs-00856122

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Keywords: Iso Competitive Balance Curves; sports;

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  1. Tim Pawlowski & Christoph Breuer & Arnd Hovemann, 2010. "Top Clubs' Performance and the Competitive Situation in European Domestic Football Competitions," Journal of Sports Economics, , vol. 11(2), pages 186-202, April.
  2. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
  3. Andrew S. Zimbalist, 2002. "Competitive Balance in Sports Leagues: An Introduction," Journal of Sports Economics, , vol. 3(2), pages 111-121, May.
  4. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 64, pages 242.
  5. Stefan Kesenne, 2000. "Revenue Sharing and Competitive Balance in Professional Team Sports," Journal of Sports Economics, , vol. 1(1), pages 56-65, February.
  6. El-Hodiri, Mohamed & Quirk, James, 1971. "An Economic Model of a Professional Sports League," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 79(6), pages 1302-19, Nov.-Dec..
  7. Craig Depken, 1999. "Free-Agency and the Competitiveness of Major League Baseball," Review of Industrial Organization, Springer, vol. 14(3), pages 205-217, May.
  8. Szymanski, Stefan, 2001. "Income Inequality, Competitive Balance and the Attractiveness of Team Sports: Some Evidence and a Natural Experiment from English Soccer," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(469), pages F69-84, February.
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Cited by:
  1. Nicolas Scelles & Christophe Durand & Liliane Bonnal & Daniel Goyeau & Wladimir Andreff, 2013. "My team is in contention? Nice, I go to the stadium! Competitive intensity in the French football Ligue 1," Economics Bulletin, AccessEcon, vol. 33(3), pages 2365-2378.

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