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Modeling Competitive Imbalance and Self-Regulation in College Sports

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  • Rodney Fort

    (University of Michigan)

Abstract

The principal-agent relationship between athletic directors and their university administration suggests a conference equilibrium of revenue-maximizing athletic directors. With smaller- and larger-revenue departments, revenue maximization predicts conference competitive imbalance. The larger the revenue dispersion, the greater the imbalance. Pooled revenue sharing increases the absolute level of talent and reduces competitive imbalance. That national championships are determined across conferences may explain the widespread adoption of nearly complete revenue sharing. The model also explains the form of the amateur requirement and predicts that competitive imbalance is invariant with respect to that amateur specification. This has obvious implications for balance-based arguments for or against increasing compensation to athletes.

Suggested Citation

  • Rodney Fort, 2018. "Modeling Competitive Imbalance and Self-Regulation in College Sports," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(2), pages 231-251, March.
    • Handle: RePEc:kap:revind:v:52:y:2018:i:2:d:10.1007_s11151-017-9591-y
    DOI: 10.1007/s11151-017-9591-y
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    References listed on IDEAS

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    Cited by:

    1. Rodney Fort, 2022. "College sports governance: “Amateurism” enforcement in big time college sports," Economics of Governance, Springer, vol. 23(3), pages 303-322, December.
    2. Alexander John Bond & Francesco Addesa, 2020. "Competitive Intensity, Fans’ Expectations, and Match-Day Tickets Sold in the Italian Football Serie A, 2012-2015," Journal of Sports Economics, , vol. 21(1), pages 20-43, January.

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