Competitive balance

Thomas Miceli ()

Chapter 6 in Topics in Sports Economics, 2025, pp 83-111 from Edward Elgar Publishing

Abstract: This chapter examines the foundational concept of competitive balance, which is the claim that sports fans prefer contests for which the outcome is unpredictable. This is also called the Uncertainty of Outcome Hypothesis. The chapter describes the origin of this hypothesis, examines the basis for it in consumer preferences, describes the manner in which it is measured, and considers the empirical evidence for and against it. It concludes by describing various policies leagues have adopted to promote balance and asks whether economic theory supports their efficacy. The results are mixed.

Keywords: Competitive balance; Uncertainty of outcome; Reserve system; Revenue sharing; Salary caps; Luxury taxes; Reverse-order drafts; Relegation (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035339389
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