Bidding for Talent in Sport

József Sákovics and Roberto Burguet
Authors registered in the RePEc Author Service: József Sákovics

No 902, Working Papers from Barcelona School of Economics

Abstract: We present a realistic and novel micro-structure for the market for athletes in league sports. In our trading mechanism the clubs bid for individual players, internalizing the effect that a player not hired might play for the competition. For inelastic talent supply, our (wage-minimizing) equilibrium supports the Coasian results of Rottenberg (1956) and Fort and Quirk (1995): talent allocation is independent of initial "ownership" and revenue sharing arrangements. When talent supply is elastic, revenue sharing decreases the aggregate amount of talent hired. This negative effect on the talent level may be efficiency enhancing when the competition for talent results in excess talent being hired. For the first time in the literature, we carry out our entire analysis using a newly formulated, unified club objective, incorporating both pecuniary and non-pecuniary benefits.

Keywords: sports leagues; club objectives; revenue sharing (search for similar items in EconPapers)
JEL-codes: D43 J31 L13 L22 L83 (search for similar items in EconPapers)
Date: 2016-04
New Economics Papers: this item is included in nep-com, nep-pke and nep-spo
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Related works:
Journal Article: BIDDING FOR TALENT IN SPORT (2019)
Working Paper: Bidding for talent in sport (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:902

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