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The Champions League and the Coase Theorem

Author

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  • Stefan Szymanski

    () (Tanaka Business School, Imperial College)

Abstract

The Coase Theorem is both one of the simplest and most profound ideas in economics. Coase’s insight was first expressed in print as a theorem by George Stigler, following the publication of the famous article “The Problem of Social Cost” by Nobel Laureate Ronald Coase (1960). Stigler stated it thus: “with zero transactions costs, private and social costs will be equal”. In this paper the Coase Theorem is approached through the medium of a sports league. While Coase’s article dates from 1960, a colleague at Chicago University published a discussion of the market for baseball players in 1956 which almost completely anticipates the more famous paper (Rottenberg (1956)).

Suggested Citation

  • Stefan Szymanski, 2006. "The Champions League and the Coase Theorem," Working Papers 0617, International Association of Sports Economists;North American Association of Sports Economists.
  • Handle: RePEc:spe:wpaper:0617
    as

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    File URL: http://web.holycross.edu/RePEc/spe/Szymanski_Coase.pdf
    File Function: Inaugural Lecture presented on May 11, 2005
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    References listed on IDEAS

    as
    1. Michael R. Butler, 1995. "Competitive Balance in Major League Baseball," The American Economist, Sage Publications, vol. 39(2), pages 46-52, October.
    2. Varouj Aivazian & Jeffrey Callen, 2003. "The Core, Transaction Costs, and the Coase Theorem," Constitutional Political Economy, Springer, vol. 14(4), pages 287-299, December.
    3. La Croix, Sumner J & Kawaura, Akihiko, 1999. "Rule Changes and Competitive Balance in Japanese Professional Baseball," Economic Inquiry, Western Economic Association International, vol. 37(2), pages 353-368, April.
    4. Craig Depken, 1999. "Free-Agency and the Competitiveness of Major League Baseball," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 14(3), pages 205-217, May.
    5. Stefan Szymanski & Stefan KÈsenne, 2004. "Competitive balance and gate revenue sharing in team sports," Journal of Industrial Economics, Wiley Blackwell, vol. 52(1), pages 165-177, March.
    6. Eckard, E Woodrow, 2001. "Free Agency, Competitive Balance, and Diminishing Returns to Pennant Contention," Economic Inquiry, Western Economic Association International, vol. 39(3), pages 430-443, July.
    7. Stefan KÉsenne, 2004. "Competitive Balance and Revenue Sharing," Journal of Sports Economics, , vol. 5(2), pages 206-212, May.
    8. Stefan Szymanski, 2006. "Tilting the Playing Field: Why a sports league planner would choose less, not more, competitive balance," Working Papers 0620, International Association of Sports Economists;North American Association of Sports Economists.
    9. Usher, Dan, 1998. "The Coase theorem is tautological, incoherent or wrong," Economics Letters, Elsevier, vol. 61(1), pages 3-11, October.
    10. Sami Dakhlia & Paul Pecorino, 2006. "Rent-seeking with scarce talent: A model of preemptive hiring," Public Choice, Springer, vol. 129(3), pages 475-486, December.
    11. Stefan Szymanski & Tommaso M. Valletti, 2005. "Promotion and Relegation in Sporting Contests," Rivista di Politica Economica, SIPI Spa, vol. 95(3), pages 3-39, May-June.
    12. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
    13. Thomas Hoehn & Stefan Szymanski, 1999. "The Americanization of European football," Economic Policy, CEPR;CES;MSH, vol. 14(28), pages 203-240, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Vincent Hogan & Patrick Massey & Shane Massey, 2013. "Competitive Balance and Match Attendance in European Rugby Union Leagues," The Economic and Social Review, Economic and Social Studies, vol. 44(4), pages 425-446.
    2. Trudo Dejonghe & Wim Van Opstal, 2010. "Competitive balance between national leagues in European football after the Bosman Case," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 6(2), pages 41-61, Settembre.
    3. Tim R. L. Fry & Guillaume Galanos & Alberto Posso, 2014. "Let's Get Messi? Top-Scorer Productivity in the European Champions League," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(3), pages 261-279, July.
    4. Helena Fornwagner, 2017. "Incentives to lose revisited: The NHL and its tournament incentives," Working Papers 2017-07, Faculty of Economics and Statistics, University of Innsbruck.
    5. Trudo Dejonghe & Wim Van Opstal, 2008. "The consequences of an open labour market in a closed product market in the economic environment of European professional football," Working Papers 0830, International Association of Sports Economists;North American Association of Sports Economists.
    6. Scelles, Nicolas & Duran, Christophe & Bonnal, Liliane & Goyeau, Daniel & Andreff, Wladimir, 2016. "Do all sporting prizes have a significant positive impact on attendance in a European national football league? Competitive intensity in the French Ligue 1," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 82-107, June.
    7. Vincent (Vincent Peter) Hogan & Patrick Massey & Shane Massey, 2014. "Analysing Match Attendance in the European Rugby Cup," Working Papers 201412, School of Economics, University College Dublin.
    8. Bernd Frick & Rob Simmons, 2014. "The footballers’ labour market after the Bosman ruling," Chapters,in: Handbook on the Economics of Professional Football, chapter 13, pages 203-226 Edward Elgar Publishing.
    9. Haan Marco & Koning Ruud & Witteloostuijn Arjen van, 2012. "The Effects of Institutional Change in European Soccer," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(3), pages 318-335, June.
    10. Patrick Massey & Shane Massey & Vincent (Vincent Peter) Hogan, 2012. "Analysing Determinants of Match Attendance in the European Rugby Cup," Working Papers 201228, School of Economics, University College Dublin.
    11. Michela Pierini, 2011. "Diritti Tv E Competitive Balance Nel Calcio Professionistico Italiano," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 7(2), pages 87-113, September.
    12. Norbäck, Pehr-Johan & Olsson, Martin & Persson, Lars, 2016. "Talent Development and Labour Market Integration: The Case of EU Football," Working Paper Series 1126, Research Institute of Industrial Economics, revised 14 Mar 2018.
    13. Vani K. Borooah & John Mangan, 2012. "Measuring competitive balance in sports using generalized entropy with an application to English premier league football," Applied Economics, Taylor & Francis Journals, vol. 44(9), pages 1093-1102, March.

    More about this item

    Keywords

    Coase;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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