Revenue Sharing and Competitive Balance in a Dynamic Contest Model

Martin Grossmann (), Helmut Max Dietl and Markus Lang ()
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Martin Grossmann: Institute for Strategy and Business Economics, University of Zurich

No 822, Working Papers from International Association of Sports Economists

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.

Keywords: Contest; Sports Economics; Competitive Balance; Revenue Sharing (search for similar items in EconPapers)
JEL-codes: L83 D92 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-mic and nep-spo
Date: 2008-08, Revised 2009-11
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http://www.holycross.edu/departments/economics/ReP ... icRevenueSharing.pdf Revised version, 2009 (application/pdf)

Related works:
Working Paper: Revenue Sharing and Competitive Balance in a Dynamic Contest Model (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:spe:wpaper:0822

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