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Who Should Pay the Sports Agent’s Commission? An Economic Analysis of Setting the Legal Rules in the Regulation of Matchmakers

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  • Brocard, Jean-François
  • Cavagnac, Michel

Abstract

We study the effects of completing the legal framework of matchmakers with a rule designating which party must pay the commission. The paper examines the two rules currently open to debate at the international level in sport: the "player-pays" principle and the "club-pays" principle. We find that the most appropriate measure entails designating the party with the lesser bargaining power to pay the intermediary’s fee. However, our main result indicates that the appropriateness of imposing an additional rule in the legal framework is a preliminary issue. Indeed, even if the best rule is chosen, welfare may be decreased by this legal initiative.

Suggested Citation

  • Brocard, Jean-François & Cavagnac, Michel, 2012. "Who Should Pay the Sports Agent’s Commission? An Economic Analysis of Setting the Legal Rules in the Regulation of Matchmakers," TSE Working Papers 13-391, Toulouse School of Economics (TSE), revised Nov 2016.
    • Handle: RePEc:tse:wpaper:27145
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Sport intermediaries; Matching; Regulation through rules; Legal framework for contracts;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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