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Competitive balance in sports leagues and the paradox of power

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  • Stefan Szymanski

    ()
    (Tanaka Business School, Imperial College)

Abstract

It is generally thought that competitive equilibrium in sports leagues involves too little competitive balance (the strong dominate the weak too much- a more even contest would be more attractive). However, it is possible to sow in a standard logit contest model that the reverse is true – the strong do not win “enough”- i.e. more wins by the strong team would increase attendance or revenues. This is consistent with Hirshleifer’s paradox of power. However, this is only true so long as the strong do not become too dominant- otherwise the regime switches to one of pre-emption: the strong never lose. This paper identifies the conditions under which the paradox of power and pre-emption will manifest themselves.

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File URL: http://college.holycross.edu/RePEc/spe/Szymanski_Paradox.pdf
File Function: Original version completed April 2006
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Bibliographic Info

Paper provided by International Association of Sports Economists & North American Association of Sports Economists in its series Working Papers with number 0618.

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Length: 12 pages
Date of creation: Oct 2006
Date of revision:
Handle: RePEc:spe:wpaper:0618

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Cited by:
  1. Smith, Aaron C.T. & Stewart, Bob, 2010. "The special features of sport: A critical revisit," Sport Management Review, Elsevier, vol. 13(1), pages 1-13, February.
  2. Raul Caruso & Ilaria Verri, 2009. "Competitive Balance dopo la sentenza Bosman: il caso della pallavolo in Italia," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 5(1), pages 59-79, Maggio.
  3. Michela Pierini, 2011. "Diritti Tv E Competitive Balance Nel Calcio Professionistico Italiano," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 7(2), pages 87-113, September.

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