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The effect of gate revenue sharing on social welfare


Dietl, H; Lang, M (2008). The effect of gate revenue sharing on social welfare. Contemporary Economic Policy, 26(3):448-459.

Abstract

This paper provides a theoretical model of a team sports league based on contest theory and studies the welfare effect of gale revenue sharing. It derives two counterintuitive results. First, it challenges the "invarianceproposition" by showing that revenue
sharing reduces competitive balance and thus produces a more unbalanced league. Second, the paper concludes that a lower degree of competitive balance compared
with the noncooperative league equilibrium yields a higher level of social welfare and club profits. Combining both results, it concludes that gate revenue sharing increases social welfare and club profits in our model.

Abstract

This paper provides a theoretical model of a team sports league based on contest theory and studies the welfare effect of gale revenue sharing. It derives two counterintuitive results. First, it challenges the "invarianceproposition" by showing that revenue
sharing reduces competitive balance and thus produces a more unbalanced league. Second, the paper concludes that a lower degree of competitive balance compared
with the noncooperative league equilibrium yields a higher level of social welfare and club profits. Combining both results, it concludes that gate revenue sharing increases social welfare and club profits in our model.

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18 citations in Web of Science®
18 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:July 2008
Deposited On:23 Jan 2009 16:33
Last Modified:21 Nov 2017 13:51
Publisher:Wiley-Blackwell
ISSN:1074-3529
Publisher DOI:https://doi.org/10.1111/j.1465-7287.2007.00090.x
Official URL:http://www3.interscience.wiley.com/journal/120174660/abstract
Related URLs:http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=33464449&loginpage=Login.asp&site=ehost-live

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