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A NLIP Model on Wage Dispersion and Team Performance

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  • Papahristodoulou, Christos

Abstract

Using a Non-Linear Integer Programming (NLIP) model, I examine if wage differences between Super talents and Normal players improve the performance of four teams which participate in a tournament, such as in the UEFA Champions League (UCL) group matches. With ad-hoc wage differences, the optimal solutions of the model show that higher wage equality seems to improve the performance of all teams, irrespectively if the elasticity of substitution between Super- and Normal- players is high or low. In addition to that, a U-type performance exists in two teams with the highest and the second high elasticity of substitution. With team data from the 2011-12 UCL group matches and from the Italian Serie A over 2010-12 seasons, the wage dispersion has no effect on team performances.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39149.

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Date of creation: 30 May 2012
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Handle: RePEc:pra:mprapa:39149

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Keywords: Players; Teams; Wages; Performance; Tournament;

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  1. Egon Franck & Stephan Nüesch, 2007. "Wage Dispersion and Team Performance - An Empirical Panel Analysis," Working Papers 0017, University of Zurich, Center for Research in Sports Administration (CRSA).
  2. Ernst Fehr & Klaus M. Schmidt, . "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers 004, Institute for Empirical Research in Economics - University of Zurich.
  3. Benno Torgler & Markus Schaffner & Bruno S.Frey & Sascha L. Schmidt, 2008. "Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field," School of Economics and Finance Discussion Papers and Working Papers Series 230, School of Economics and Finance, Queensland University of Technology.
  4. Robert Breunig & Bronwyn Garrett-Rumba & Mathieu Jardin & Yvon Rocaboy, 2012. "Wage dispersion and team performance: a theoretical model and evidence from baseball," CEPR Discussion Papers 663, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  5. Brandon Avrutin & Paul Sommers, 2007. "Work Incentives and Salary Distributions in Major League Baseball," Atlantic Economic Journal, International Atlantic Economic Society, vol. 35(4), pages 509-510, December.
  6. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
  7. Levine, David, 1989. "Cohesiveness, Productivity, and Wage Dispersion," Institute for Research on Labor and Employment, Working Paper Series qt8kd4d0p4, Institute of Industrial Relations, UC Berkeley.
  8. Milgrom, Paul R, 1988. "Employment Contracts, Influence Activities, and Efficient Organization Design," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 42-60, February.
  9. Papahristodoulou, Christos, 2007. "An analysis of Champions League match statistics," MPRA Paper 3605, University Library of Munich, Germany.
  10. repec:ebl:ecbull:v:1:y:2003:i:2:p:1-10 is not listed on IDEAS
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