Division Play and Outcome Uncertainty in Sports Leagues

Young Hoon Lee and Rodney Fort ()
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Rodney Fort: University of Michigan

No 2204, Working Papers from Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy)

Abstract: This paper offers a model of the impact of division play on outcome uncertainty (OU) holding the level of competitive balance (CB) constant, that is, OU/CB. Previous work has focused almost entirely on CB. The model is based on numerical analysis to demonstrate the impacts of league transition to division play on OU/CB. Marginal effects of schedule imbalance, division strength, and the number of divisions on OU/CB are determined using regression on the numerical anlaysis results. Fitted vlaues of OU/CB from applying the estimated model coefficients to actual MLB data, as that league moved from no divisions through episodes of 2 and 3 divisions are compared to estimates of OU/CB on the same data using now well-established unbiased estimators of both OU and CB. The results are quite close, suggesting the model provides important insights for league policy makers and outside analysts about the neglected issue of league policy impacts on OU and, more specifically, how they happen as a result of schedule imbalance and division strength.

Pages: 37 pages
Date: 2022
New Economics Papers: this item is included in nep-spo
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https://tinyurl.com/yp5v2x9p First version, 2022 (application/pdf)

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Journal Article: Division Play and Outcome Uncertainty in Sports Leagues (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:sgo:wpaper:2204

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