Rank-Order Tournaments, Probability of Winning and Investing in Talent: Evidence from Champions League Qualifying Rules

Colin Green (), Fernando Lozano () and Rob Simmons ()

No 8950, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We analyse how a change in the probability of winning a tournament affects an agent's effort using the qualification rules for entry into the group and playoff stages of the UEFA Champions' League. Our results suggest that increasing the number of slots that a national league gets in the Champions' League leads to increases in investment in talent ex ante. This effect is largest among the teams that in the previous season just failed to qualify. This suggests that changes in prize structure leads to changes in investment decisions amongst those clubs most affected at the margin. However, we also find that incumbent teams that have already qualified for the Champions' League simultaneously raise their efforts, consistent with the occurrence of an arms race among top European football teams.

Keywords: UEFA Champions League; tournaments (search for similar items in EconPapers)
JEL-codes: M5 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-03
New Economics Papers: this item is included in nep-hrm and nep-spo
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Citations: View citations in EconPapers (7)

Published - published in: NIESR Review: Special Issue of Sports Economics , 2015, 232 (1), R30 - R40

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Journal Article: Rank-order tournaments, probability of winning and investing in talent: evidence from champions' league qualifying rules (2015)
Journal Article: Rank-Order Tournaments, Probability of Winning and Investing in Talent: Evidence from Champions' League Qualifying Rules (2015)
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