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Game Theoretic Analysis of Basic Team Sports Leagues

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  • Paul Madden

    () (University of Manchester, Manchester, United Kingdom)

Abstract

The article proposes a new “strategic market game” (SMG) approach to modeling strategic interactions between clubs in professional team sports leagues, and generalizes a basic framework used in previous literature (two clubs, fixed talent supply and club revenues that depend only on relative team qualities), to allow variable talent supply and club revenues that depend on absolute (and relative) team qualities. The new approach incorporates club talent market power (duopsony), overlooked by existing approaches; in both the basic and the more general framework, Nash equilibrium competitive balance is analyzed, with and without revenue sharing and with comparisons to existing analyses.

Suggested Citation

  • Paul Madden, 2011. "Game Theoretic Analysis of Basic Team Sports Leagues," Journal of Sports Economics, , vol. 12(4), pages 407-431, August.
  • Handle: RePEc:sae:jospec:v:12:y:2011:i:4:p:407-431
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    File URL: http://jse.sagepub.com/content/12/4/407.abstract
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    Citations

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    Cited by:

    1. Paul Madden & Mario Pezzino, 2013. "Sports League Quality, Broadcaster TV Rights Bids and Wholesale Regulation of Sports Channels," The School of Economics Discussion Paper Series 1304, Economics, The University of Manchester.
    2. Paul Madden, 2012. "Welfare Economics of "Financial Fair Play" in a Sports League With Benefactor Owners," The School of Economics Discussion Paper Series 1221, Economics, The University of Manchester.
    3. Roberto Burguet & Jozsef Sakovics, 2016. "To the highest bidder: The market for talent in sports leagues," ESE Discussion Papers 275, Edinburgh School of Economics, University of Edinburgh.
    4. XiaoGang Che & Brad Humphreys, 2015. "Competition Between Sports Leagues: Theory and Evidence on Rival League Formation in North America," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(2), pages 127-143, March.
    5. Helmut Dietl & Carlos Gomez-Gonzalez & Cornel Nesseler, 2017. " Are women or men better team managers? Evidence from professional team sports," Working Papers 364, University of Zurich, Department of Business Administration (IBW).
    6. Madden, Paul, 2012. "Fan welfare maximization as a club objective in a professional sports league," European Economic Review, Elsevier, vol. 56(3), pages 560-578.
    7. Roberto Burguet & József Sákovics, 2016. "Bidding for Talent in Sport," Working Papers 902, Barcelona Graduate School of Economics.
    8. Rockerbie, Duane W & Easton, Stephen, 2016. "Of Bricks and Bats: New Stadiums, Talent Supply and Team Performance in Major League Baseball," MPRA Paper 77430, University Library of Munich, Germany.
    9. Helmut Dietl & Markus Lang & Cornel Nesseler, 2017. " The Impact of Government Subsidies in Professional Team Sports Leagues," Working Papers 366, University of Zurich, Department of Business Administration (IBW).

    More about this item

    Keywords

    sports leagues; duopsony; revenue sharing;

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