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A NLIP Model on Wage Dispersion and Team Performance


  • Papahristodoulou, Christos


Using a Non-Linear Integer Programming (NLIP) model, I examine if wage differences between Super talents and Normal players improve the performance of four teams which participate in a tournament, such as in the UEFA Champions League (UCL) group matches. With ad-hoc wage differences, the optimal solutions of the model show that higher wage equality seems to improve the performance of all teams, irrespectively if the elasticity of substitution between Super- and Normal- players is high or low. In addition to that, a U-type performance exists in two teams with the highest and the second high elasticity of substitution. With team data from the 2011-12 UCL group matches and from the Italian Serie A over 2010-12 seasons, the wage dispersion has no effect on team performances.

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  • Papahristodoulou, Christos, 2012. "A NLIP Model on Wage Dispersion and Team Performance," MPRA Paper 39149, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:39149

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    References listed on IDEAS

    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    2. Benno Torgler & Markus Schaffner & Bruno S. Frey & Sascha L. Schmidt, 2008. "Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field," CREMA Working Paper Series 2008-11, Center for Research in Economics, Management and the Arts (CREMA).
    3. Milgrom, Paul R, 1988. "Employment Contracts, Influence Activities, and Efficient Organization Design," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 42-60, February.
    4. Robert Breunig & Bronwyn Garrett-Rumba & Mathieu Jardin & Yvon Rocaboy, 2014. "Wage dispersion and team performance: a theoretical model and evidence from baseball," Applied Economics, Taylor & Francis Journals, vol. 46(3), pages 271-281, January.
    5. Levine, David I., 1991. "Cohesiveness, productivity, and wage dispersion," Journal of Economic Behavior & Organization, Elsevier, vol. 15(2), pages 237-255, March.
    6. Egon Franck & Stephan Nüesch, 2007. "Wage Dispersion and Team Performance - An Empirical Panel Analysis," Working Papers 0017, University of Zurich, Center for Research in Sports Administration (CRSA).
    7. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-580, June.
    8. repec:ebl:ecbull:v:1:y:2003:i:2:p:1-10 is not listed on IDEAS
    9. Brandon Avrutin & Paul Sommers, 2007. "Work Incentives and Salary Distributions in Major League Baseball," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(4), pages 509-510, December.
    10. Papahristodoulou, Christos, 2007. "An analysis of Champions League match statistics," MPRA Paper 3605, University Library of Munich, Germany.
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    More about this item


    Players; Teams; Wages; Performance; Tournament;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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