Investment Behaviour in a Two-Period Contest Model
This paper presents a two-period model of talent investments in which two clubs compete for a contest prize. We show that multiple equilibria are possible, using a closed-loop approach with strictly convex costs: The large-market club invests in both periods more than the small-market club or the small-market club invests in both periods more than the large-market club. In the case of an open-loop approach with strictly convex costs, however, the large-market club always invests more. The open-loop and closed-loop equilibria coincide if costs are linear.
Volume (Year): 165 (2009)
Issue (Month): 3 (September)
|Contact details of provider:|| Web page: https://www.mohr.de/jite|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniel R. Marburger, 1997. "Gate Revenue Sharing And Luxury Taxes In Professional Sports," Contemporary Economic Policy, Western Economic Association International, vol. 15(2), pages 114-123, 04.
- Martin Grossmann & Helmut M. Dietl & Urs Trinkner, 2008. "The Effect of Marginal Cost Elasticity on Competitive Balance," Journal of Sports Economics, , vol. 9(4), pages 339-350, August.
- Reinganum, Jennifer F., 1981.
"Dynamic games of innovation,"
Journal of Economic Theory,
Elsevier, vol. 25(1), pages 21-41, August.
- SZYMANSKI, Stefan & KÉSENNE, Stefan, 2003.
"Competitive balance and gate revenue sharing in team sports,"
2003003, University of Antwerp, Faculty of Applied Economics.
- Stefan Szymanski & Stefan KÈsenne, 2004. "Competitive balance and gate revenue sharing in team sports," Journal of Industrial Economics, Wiley Blackwell, vol. 52(1), pages 165-177, 03.
- El-Hodiri, Mohamed & Quirk, James, 1971. "An Economic Model of a Professional Sports League," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1302-19, Nov.-Dec..
- A. M. Spence, 1981. "The Learning Curve and Competition," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 49-70, Spring.
- Tollison, Robert D, 1982. "Rent Seeking: A Survey," Kyklos, Wiley Blackwell, vol. 35(4), pages 575-602.
- Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-98, December.
When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(200909)165:3_401:ibiatc_2.0.tx_2-c. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert)
If references are entirely missing, you can add them using this form.