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Revenue sharing and competitive balance in a dynamic contest model


Dietl, H; Grossmann, M; Lang, M (2010). Revenue sharing and competitive balance in a dynamic contest model. Review of Industrial Organization, 36(1):17-36.

Abstract

This paper presents a dynamic model of talent investments in a team sports league with an infinite time horizon. We show that the clubs’ investment decisions and the effects of revenue sharing on competitive balance depend on the following three factors: (i) the cost function of talent investments, (ii) the clubs’ market sizes, and (iii) the initial endowments of talent stock. We analyze how these factors interact in the transition to the steady state as well as in the steady state itself.

Abstract

This paper presents a dynamic model of talent investments in a team sports league with an infinite time horizon. We show that the clubs’ investment decisions and the effects of revenue sharing on competitive balance depend on the following three factors: (i) the cost function of talent investments, (ii) the clubs’ market sizes, and (iii) the initial endowments of talent stock. We analyze how these factors interact in the transition to the steady state as well as in the steady state itself.

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9 citations in Web of Science®
11 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
Uncontrolled Keywords:Competitive balance - Contests - Revenue sharing - Sports economics
Language:English
Date:February 2010
Deposited On:08 Jun 2010 15:08
Last Modified:05 Apr 2016 14:10
Publisher:Springer
ISSN:0889-938X
Additional Information:The original publication is available at www.springerlink.com
Publisher DOI:https://doi.org/10.1007/s11151-009-9236-x

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