Modelling Professional Sports Leagues: An Industrial Organization Approach

Modelling Professional Sports Leagues: An Industrial Organization Approach This paper outlines a simple model of professional sports contests that can provide a number of useful insights into the operations of professional sports leagues. The model incorporates a concern for competitive balance on the part of fans and has the advantage that a number of league market structures can be analyzed using standard industrial organization techniques. The model can also be used to determine the effect of a number of league rules including revenue sharing, payroll caps, and luxury taxes on the respective demands for talented players. In addition, it can be shown that the model of professional sports contests developed here has a useful parallel with a standard model of differentiated products. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Modelling Professional Sports Leagues: An Industrial Organization Approach

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Publisher
Springer US
Copyright
Copyright © 2009 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-009-9207-2
Publisher site
See Article on Publisher Site

Abstract

This paper outlines a simple model of professional sports contests that can provide a number of useful insights into the operations of professional sports leagues. The model incorporates a concern for competitive balance on the part of fans and has the advantage that a number of league market structures can be analyzed using standard industrial organization techniques. The model can also be used to determine the effect of a number of league rules including revenue sharing, payroll caps, and luxury taxes on the respective demands for talented players. In addition, it can be shown that the model of professional sports contests developed here has a useful parallel with a standard model of differentiated products.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Jun 20, 2009

References

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