Professional Team Sports Are Only a Game: The Walrasian Fixed-Supply Conjecture Model, Contest-Nash Equilibrium, and the Invariance Principle

Stefan Szymanski

Chapter 8 in The Comparative Economics of Sport, 2010, pp 244-261 from Palgrave Macmillan

Abstract: Abstract This chapter explores the standard 2-team model of talent choice in a professional sports league and argues that the application of Nash concepts leads to a different equilibrium than that which is normally identified. In particular, it is shown that the invariance principle for gate-revenue sharing no longer holds. Because the standard model, which is here called the Walrasian fixed-supply conjecture model, is widely taught in sports management and economics programs, these finding have important implications for teachers as well as researchers.

Keywords: contests; revenue sharing; competitive balance (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-27427-3_8

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DOI: 10.1057/9780230274273_8

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