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Cost Incentives in European Football

Author

Listed:
  • Arne Feddersen

    (University of Southern Denmark)

  • Brad Humphreys

    (University of Alberta, Department of Economics)

  • Brian Soebbing

    (Louisiana State University)

Abstract

We examine the effects of financial incentives on effort supplied by football clubs in European domestic leagues. Tournament theory predicts that the amount of effort supplied varies with returns to effort. We analyze variation in 31,746 domestic league match outcomes in ten European leagues over eleven seasons, exploiting the actual standings on the league table to generate variables reflecting incentives to provide effort in each match. Results from ordered logit regressions indicate that the effort implied by observed match outcomes support the predictions of tournament theory in this setting; clubs supply more or less effort in response to changes in incentives.

Suggested Citation

  • Arne Feddersen & Brad Humphreys & Brian Soebbing, 2012. "Cost Incentives in European Football," Working Papers 2012-13, University of Alberta, Department of Economics.
    • Handle: RePEc:ris:albaec:2012_013
    as

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    File URL: https://sites.ualberta.ca/~econwps/2012/wp2012-25.pdf13
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    References listed on IDEAS

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    Cited by:

    1. Green, Colin & Lozano, Fernando & Simmons, Rob, 2015. "Rank-order tournaments, probability of winning and investing in talent: evidence from champions' league qualifying rules," National Institute Economic Review, National Institute of Economic and Social Research, vol. 232, pages 30-40, May.
    2. Budzinski, Oliver, 2017. "Market-internal financial regulation in sports as an anticompetitive institution," Ilmenau Economics Discussion Papers 110, Ilmenau University of Technology, Institute of Economics.
    3. Pawlowski, Tim & Budzinski, Oliver, 2014. "Competitive balance and attention level effects: Theoretical considerations and preliminary evidence," Ilmenau Economics Discussion Papers 84, Ilmenau University of Technology, Institute of Economics.
    4. Budzinski, Oliver, 2017. "Sind Wettbewerbe im Profisport Rattenrennen?," Ilmenau Economics Discussion Papers 104, Ilmenau University of Technology, Institute of Economics.
    5. Budzinski, Oliver & Pawlowski, Tim, 2014. "The behavioural economics of competitive balance: Implications for league policy and championship management," Ilmenau Economics Discussion Papers 89, Ilmenau University of Technology, Institute of Economics.
    6. Budzinski, Oliver & Müller-Kock, Anika, 2016. "Market power and media revenue allocation in professonal sports: The case of formula one," Ilmenau Economics Discussion Papers 102, Ilmenau University of Technology, Institute of Economics.
    7. Jiří LahviÄ ka, 2015. "Using Monte Carlo Simulation to Calculate Match Importance," Journal of Sports Economics, , vol. 16(4), pages 390-409, May.
    8. Lahvicka, Jiri, 2012. "Using Monte Carlo simulation to calculate match importance: the case of English Premier League," MPRA Paper 40998, University Library of Munich, Germany.

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    More about this item

    Keywords

    effort supply; football; UEFA Champions League;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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