Promotion and Relegation in Sporting Contests

Stefan Szymanski and Tommaso Valletti

Chapter 6 in The Comparative Economics of Sport, 2010, pp 198-228 from Palgrave Macmillan

Abstract: Abstract The conventional model of a team sports league is based on the North American major leagues which have a fixed number of members, entry is rare and only granted by permission of the incumbents (the closed system). European soccer leagues operate a system of promotion and relegation, effectively permitting entry on merit to all-comers (the open system). This paper examines the impact of openness on the incentive of teams to invest (expend effort) and share resources (redistribution) in the context of a Tullock contest. The main conclusion of the paper is that openness tends to enhance effort incentives, but diminishes the incentive to share income. JEL Codes: L83, P51.

Keywords: Revenue Sharing; Major League Baseball; Comparative Economic; Competitive Balance; Contest Success Function (search for similar items in EconPapers)
Date: 2010
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Journal Article: Promotion and Relegation in Sporting Contests (2005)
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DOI: 10.1057/9780230274273_6

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