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The Louis–Schmelling Paradox and the League Standing Effect Reconsidered

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  • Brad R. Humphreys
  • Li Zhou

Abstract

Fifty years on we examine two key propositions in Neale’s “Peculiar Economics†: The need for competitors in sport to have opponents of similar ability in order to earn large revenues and the effect of frequent changes sports leagues’ standings on consumer demand. We develop a consumer choice model under uncertainty, and a structural econometric model, to motivate and test these ideas. Unfortunately, neither receives much empirical or theoretical support relative to alternative factors affecting consumer choice like loss aversion and home win preference.

Suggested Citation

  • Brad R. Humphreys & Li Zhou, 2015. "The Louis–Schmelling Paradox and the League Standing Effect Reconsidered," Journal of Sports Economics, , vol. 16(8), pages 835-852, December.
    • Handle: RePEc:sae:jospec:v:16:y:2015:i:8:p:835-852
    DOI: 10.1177/1527002515587260
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    References listed on IDEAS

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    Cited by:

    1. Brad R. Humphreys & Thomas J. Miceli, 2019. "The Peculiar Preferences of Sports Fans: Toward a Preference-Based Motivation for the Uncertainty of Outcome Hypothesis," Journal of Sports Economics, , vol. 20(6), pages 782-796, August.
    2. Lucas M. Besters & Jan (J.C.) van Ours & Martin A. van Tuijl, 2018. "How outcome uncertainty, loss aversion and team quality affect stadium attendance in Dutch professional football," Tinbergen Institute Discussion Papers 18-082/V, Tinbergen Institute.
    3. Ge, Qi, 2018. "Sports sentiment and tipping behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 95-113.
    4. Besters, Lucas, 2018. "Economics of professional football," Other publications TiSEM d9e6b9b7-a17b-4665-9cca-1, Tilburg University, School of Economics and Management.
    5. Pedro Garcia-del-Barrio & J. James Reade, 2022. "Does certainty on the winner diminish the interest in sport competitions? The case of formula one," Empirical Economics, Springer, vol. 63(2), pages 1059-1079, August.
    6. Nola Agha & Thomas Rhoads, 2016. "The League Standing Effect: The Case of a Split Season in Minor League Baseball," Working Papers 2016-13, Towson University, Department of Economics, revised Jul 2016.
    7. Georgios Nalbantis & Tim Pawlowski, 2019. "U.S. Demand for European Soccer Telecasts: A Between-Country Test of the Uncertainty of Outcome Hypothesis," Journal of Sports Economics, , vol. 20(6), pages 797-818, August.
    8. Budzinski, Oliver, 2017. "Sind Wettbewerbe im Profisport Rattenrennen?," Ilmenau Economics Discussion Papers 104, Ilmenau University of Technology, Institute of Economics.
    9. 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.
    10. Brian M. Mills & Rodney Fort, 2023. "Performance Quality Preference Heterogeneity in Major League Baseball," Journal of Sports Economics, , vol. 24(3), pages 352-373, April.
    11. Humphreys, Brad R & Pérez, Levi, 2019. "Loss aversion, upset preference, and sports television viewing audience size," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 61-67.
    12. John Charles Bradbury, 2019. "Determinants Of Revenue In Sports Leagues: An Empirical Assessment," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 121-140, January.
    13. Dirk Semmelroth & Bernd Frick & Robert Simmons & Hojun Sung, 2022. "Where to Go Next? Examining the Effect of Franchise Expansion and Location on Game-Level Attendance in Major League Soccer," Journal of Sports Economics, , vol. 23(5), pages 524-547, June.
    14. Budzinski, Oliver & Gänßle, Sophia & Kunz-Kaltenhäuser, Philipp, 2019. "How does online streaming affect antitrust remedies to centralized marketing? The case of European football broadcasting rights," Ilmenau Economics Discussion Papers 128, Ilmenau University of Technology, Institute of Economics.
    15. António Miguel Martins & Susana Cró, 2018. "The Demand for Football in Portugal," Journal of Sports Economics, , vol. 19(4), pages 473-497, May.
    16. Hojun Sung & Hyunwoong Pyun, 2023. "Disaggregated Attendance Demand: Comparing Daily Ticket Purchasers and Season Ticket Holders in K-League 1," Journal of Sports Economics, , vol. 24(6), pages 717-736, August.
    17. Nicolas Scelles & Qi Peng & Maurizio Valenti, 2021. "Do the Peculiar Economics of Professional Team Sports Apply to Esports? Sequential Snowballing Literature Reviews and Implications," Economies, MDPI, vol. 9(1), pages 1-18, March.
    18. Tim Pawlowski & Georgios Nalbantis & Dennis Coates, 2018. "Perceived Game Uncertainty, Suspense And The Demand For Sport," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 173-192, January.
    19. Besters, Lucas M. & van Ours, Jan C. & van Tuijl, Martin A., 2019. "How outcome uncertainty, loss aversion and team quality affect stadium attendance in Dutch professional football," Journal of Economic Psychology, Elsevier, vol. 72(C), pages 117-127.

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