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Tilting the Playing Field: Why a sports league planner would choose less, not more, competitive balance

Author

Listed:
  • Stefan Szymanski

    (Tanaka Business School, Imperial College)

Abstract

It has traditionally been argued that the organizer of a sports league would prefer more competitive balance to the level that emerges in a noncooperative equilibrium. This argument has been used to justify restraints on competition between teams, which also tend to raise profits at the expense of players and consumers. This paper shows that in theory a planner would prefer less, not more, competitive balance. The paper uses data from Major League Baseball to show just how unbalanced a league planner would choose.

Suggested Citation

  • Stefan Szymanski, 2006. "Tilting the Playing Field: Why a sports league planner would choose less, not more, competitive balance," Working Papers 0620, International Association of Sports Economists;North American Association of Sports Economists.
    • Handle: RePEc:spe:wpaper:0620
    as

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    File URL: http://web.holycross.edu/RePEc/spe/Szymanski_Tilting.pdf
    File Function: Original version completed October 2004
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    References listed on IDEAS

    as
    1. Stefan KÉsenne, 2004. "Competitive Balance and Revenue Sharing," Journal of Sports Economics, , vol. 5(2), pages 206-212, May.
    2. Stefan Szymanski & Stefan Késenne, 2010. "Competitive Balance and Gate Revenue Sharing in Team Sports," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 7, pages 229-243, Palgrave Macmillan.
    3. Stefan Szymanski, 2010. "The Economic Design of Sporting Contests," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 1, pages 1-78, Palgrave Macmillan.
    4. Marc Poitras, 2006. "Do New Major League Ballparks Pay for Themselves?," The Journal of Business, University of Chicago Press, vol. 79(5), pages 2275-2300, September.
    5. Stefan Szymanski, 2004. "Professional Team Sports Are Only a Game," Journal of Sports Economics, , vol. 5(2), pages 111-126, May.
    6. Daniel, Rascher, 1999. "A Test of the Optimal Positive Production Network Externality in Major League Baseball," MPRA Paper 25832, University Library of Munich, Germany.
    7. Glenn Knowles & Keith Sherony & Mike Haupert, 1992. "The Demand for Major League Baseball: A Test of the Uncertainty of Outcome Hypothesis," The American Economist, Sage Publications, vol. 36(2), pages 72-80, October.
    8. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Oliver Budzinski, 2011. "The Institutional Framework for Doing Sports Business: Principles of EU Competition Policy in Sports Markets," Working Papers 108/11, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    2. Budzinski, Oliver & Pawlowski, Tim, 2014. "The behavioural economics of competitive balance: Implications for league policy and championship management," Ilmenau Economics Discussion Papers 89, Ilmenau University of Technology, Institute of Economics.
    3. Stefan Szymanski, 2010. "Teaching Competition in Professional Sports Leagues," The Journal of Economic Education, Taylor & Francis Journals, vol. 41(2), pages 150-168, March.
    4. Helmut M. Dietl & Markus Lang & Stephan Werner, 2009. "Social Welfare in Sports Leagues with Profit‐Maximizing and/or Win‐Maximizing Clubs," Southern Economic Journal, John Wiley & Sons, vol. 76(2), pages 375-396, October.
    5. Martin B. Schmidt, 2021. "The Competitive Returns To The Global Search For Talent: Professional Sports Markets And Foreigners," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 396-419, January.
    6. Stefan Szymanski, 2010. "The Champions League and the Coase Theorem," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 10, pages 202-225, Palgrave Macmillan.
    7. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    8. Budzinski, Oliver & Feddersen, Arne, 2015. "Grundlagen der Sportnachfrage: Theorie und Empirie der Einflussfaktoren auf die Zuschauernachfrage," Ilmenau Economics Discussion Papers 94, Ilmenau University of Technology, Institute of Economics.
    9. J. James Reade, 2023. "Large Sporting Events and Public Health and Safety," Economics Discussion Papers em-dp2023-04, Department of Economics, University of Reading.

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    More about this item

    Keywords

    competitive balance; sports leagues; baseball;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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