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The Balancing Act: The Optimal Assignment of New Players in Sports Leagues

Huasheng Song and Ruqu Wang ()
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Ruqu Wang: CRPE, School of Economics, Zhejiang University

Annals of Economics and Finance, 2019, vol. 20, issue 2, 525-540

Abstract: In this paper, we investigate the optimal allocation of new players in professional sports leagues. A new player is to be allocated to the teams in a league. The league maximizes the attractiveness of the contests, which is equivalent to suspense and competitive balance in our model. Meanwhile, the teams maximize their winning probabilities. In the static model, we show that it is always optimal for the league to allocate the new player to the weakest team. However, competition between teams for this new player may or may not lead to this optimal allocation. In the dynamic model, we show that allocating the new player to the weakest team with probability one may lead to shirking in the teams in the initial periods; this probability must be low enough to induce full effort from the teams.

Keywords: Sports leagues; Competitive balance; Optimal allocation (search for similar items in EconPapers)
JEL-codes: J44 Z22 Z28 (search for similar items in EconPapers)
Date: 2019
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