Abstract
In the present chapter, a general model of competition between clubs in sports leagues with flexible supply of inputs is studied. There are externalities between clubs because it takes more than one club to produce games and tournaments. It is assumed that the externalities take the form of complementarities. Firstly, it is shown that revenue sharing leads to lower overall quality of sports leagues. Secondly, it is shown that the optimal quality for the league is lower (higher) than the quality in a league without revenue sharing in case of negative (positive) externalities between clubs. Thirdly an example is used to illustrate the findings.
| Original language | English |
|---|---|
| Title of host publication | Trends in Mathematical Economics : Dialogues Between Southern Europe and Latin America |
| Editors | Alberto A. Pinto, Elvio Accinelli Gamba, Athanasios N. Yannacopoulos, Carlos Hervés-Beloso |
| Number of pages | 18 |
| Place of Publication | Cham |
| Publisher | Springer Science+Business Media |
| Publication date | 2016 |
| Pages | 245-262 |
| Chapter | 12 |
| ISBN (Print) | 9783319325415 |
| ISBN (Electronic) | 9783319325439 |
| DOIs | |
| Publication status | Published - 2016 |
Keywords
- Complementarity
- Revenue sharing
- Sports leagues
- Supermodularity
- Competition in sports leagues
- European vs. American sports leagues
- Level of talent
- Profit maximization