Quantifying speculative-bubble effects in major European soccer leagues

John Fry and Jane M. Binner

Economics Letters, 2025, vol. 248, issue C

Abstract: We apply the theory of super-exponential rational bubbles to football transfer data. Refining previous qualitative approaches we model the aggregate transfer spend as a fraction of the TV income. Evidence of substantial bubble effects is found across the English, French, German and Italian leagues. This suggests long-term reductions in transfer spending relative to TV receipts. Our model predicts the existence of other signs of soccer bubbles beyond over-pricing. These include differences in the market for star players and the market for regular players and other signs of illiquidity.

Keywords: Behavioural economics; Econophysics; Finance; Speculative bubbles; Sports (search for similar items in EconPapers)
JEL-codes: C1 G1 Z2 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:248:y:2025:i:c:s016517652500045x

DOI: 10.1016/j.econlet.2025.112208

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