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Increasing Downside or Outer Risk? The Challenge of Measuring Competitive Imbalance in Closed and Open Leagues

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  • Jean‐Pascal Gayant
  • Nicolas Le Pape

Abstract

In two seminal articles, Menezes, Geiss, and Tressler (1980) and Menezes and Wang (2005) have defined the concepts of increases in downside and in outer risk. Such notions are useful to give intrinsic characterizations of the notions of prudence and temperance. In this article, we explore a new application about higher‐order risk preferences: the measurement of competitive imbalance in sports leagues. We show that desirable properties for the measurement of imbalance are the inclination to any increase in downside risk in the context of closed leagues, and the aversion to any increase in outer risk in the context of open leagues.

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  • Jean‐Pascal Gayant & Nicolas Le Pape, 2017. "Increasing Downside or Outer Risk? The Challenge of Measuring Competitive Imbalance in Closed and Open Leagues," Southern Economic Journal, John Wiley & Sons, vol. 83(3), pages 774-795, January.
    • Handle: RePEc:wly:soecon:v:83:y:2017:i:3:p:774-795
    DOI: 10.1002/soej.12184
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    Cited by:

    1. Jean-Pascal Guironnet, 2018. "Incertitude de classement final et affluence en Ligue 1 française de football : une nouvelle approche," Revue d'économie politique, Dalloz, vol. 128(4), pages 641-666.
    2. Dubois, Marc, 2022. "Dominance criteria on grids for measuring competitive balance in sports leagues," Mathematical Social Sciences, Elsevier, vol. 115(C), pages 1-10.
    3. Marc Dubois, 2020. "Dominance Criteria on Grids for Measuring Seasonal Competitive Imbalance in Sports Leagues," Working Papers hal-02617635, HAL.

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