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Profit vs. win maximization in a league: a paradox

Author

Listed:
  • Luc Arrondel

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Richard Duhautois

    (LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - Cnam - Conservatoire National des Arts et Métiers [Cnam])

  • Jean-François Laslier

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

The paper studies a very simple game-theoretical model of sports competition such as the European football leagues. In this oligopoly-type context, the Cournot-Nash equilibrium reveals a paradoxical differentiation between clubs: those that include not only profit but also sporting performance in their objectives end up generating more profit than others who purely maximize profit.

Suggested Citation

  • Luc Arrondel & Richard Duhautois & Jean-François Laslier, 2023. "Profit vs. win maximization in a league: a paradox," PSE Working Papers halshs-04358491, HAL.
    • Handle: RePEc:hal:psewpa:halshs-04358491
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04358491v1
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    References listed on IDEAS

    as
    1. Paul Madden & Terry Robinson, 2012. "Supporter Influence on Club Governance in a Sports League; a “Utility Maximization” Model," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(4), pages 339-360, September.
    2. Stephanie Leach & Stefan Szymanski, 2015. "Making Money Out of Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(1), pages 25-50, February.
    3. Pedro Garcia-del-Barrio & Stefan Szymanski, 2009. "Goal! Profit Maximization Versus Win Maximization in Soccer," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 34(1), pages 45-68, February.
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    6. Sloane, Peter J, 1971. "The Economics of Professional Football: The Football Club as a Utility Maximiser," Scottish Journal of Political Economy, Scottish Economic Society, vol. 18(2), pages 121-146, June.
    7. Luc Arrondel & Jean-Pascal Gayant & Jean-François Laslier, 2023. "Economic analysis of the 12th man: should the fans be paid?," PSE-Ecole d'économie de Paris (Postprint) halshs-03962599, HAL.
    8. Rodney Fort, 2015. "Managerial Objectives: A Retrospective on Utility Maximization in Pro Team Sports," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(1), pages 75-89, February.
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    10. Wladimir Andreff, 2007. "French Football: A Financial Crisis Rooted in Weak Governance," Post-Print halshs-00270019, HAL.
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