Promotion and Relegation in Sporting Contests
The conventional model of a team sports league is based on the North American major leagues which have a fixed number of members, entry is rare and only granted by permission of the incumbents (the closed system). European soccer leagues operate a system of promotion and relegation, effectively permitting entry on merit to all-comers (the open system). This paper examines the impact of openness on the incentive of teams to invest (expend effort) and share resources (redistribution) in the context of a Tullock contest. The main conclusion of the paper is that openness tends to enhance effort incentives, but diminishes the incentive to share income.
Volume (Year): 95 (2005)
Issue (Month): 3 (May-June)
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- Baye, M.R. & Kovenock, D. & De Vries, C.G., 1993.
"The Solution to the Tullock Rent-Seeking Game when R > 2: Mixed Strategy Equilibria and Mean Dissipation Rates,"
10-93-9, Pennsylvania State - Department of Economics.
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