# Why football players may benefit from the shadow of the transfer system´

Franck, E; Dietl, H; Lang, M (2008). Why football players may benefit from the shadow of the transfer system´. European Journal of Law and Economics, 26(2):129-151.

## Abstract

Transfer restrictions have a long tradition in professional sports but came under heavy attack in recent years (e.g. Bosman ruling, Monti system). Based on a bargaining model with stochastic player productivity, we show that less restrictive transfer rules reallocate ex post bargaining power from players to clubs. This reallocation is efficient and in the ex ante self-interest of players. The right to charge transfer fees enables clubs to insure their players. The players, in turn, benefit by converting risky future income into riskless current income. Overall, player utility is higher under more than under less restrictive transfer rules.

Transfer restrictions have a long tradition in professional sports but came under heavy attack in recent years (e.g. Bosman ruling, Monti system). Based on a bargaining model with stochastic player productivity, we show that less restrictive transfer rules reallocate ex post bargaining power from players to clubs. This reallocation is efficient and in the ex ante self-interest of players. The right to charge transfer fees enables clubs to insure their players. The players, in turn, benefit by converting risky future income into riskless current income. Overall, player utility is higher under more than under less restrictive transfer rules.

## Citations

2 citations in Web of Science®
1 citation in Scopus®

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Item Type: Journal Article, refereed, original work 03 Faculty of Economics > Department of Business Administration 330 Economics English October 2008 17 Nov 2008 15:13 05 Apr 2016 12:32 Springer 0929-1261 The original publication is available at www.springerlink.com 10.1007/s10657-008-9059-5
Permanent URL: http://doi.org/10.5167/uzh-4821

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