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Bidding for talent in sport

Roberto Burguet () and József Sákovics ()
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ESE Discussion Papers from Edinburgh School of Economics, University of Edinburgh

Abstract: We present a novel micro-structure for the market for athletes. Clubs simultaneously target bids at the players, in (Nash) equilibrium internalizing whether - depending on the other clubs' bids - a player not hired would play for the competition. For low/inelastic talent supply, we support - and generalize to heterogeneous players - the Coasian results of Rottenberg (1956) and Fort and Quirk (1995): talent allocation is efficient and independent of initial "ownership" and revenue sharing arrangements. We also characterize equilibria for high/elastic supply. The analysis uses a non-specic club objective with an endogenously derived trade-off between pecuniary and non-pecuniary benefits.

Keywords: competitive balance; competitive foreclosure; contested work- (search for similar items in EconPapers)
JEL-codes: J4 L1 L2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-spo
Date: 2018-01
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Journal Article: BIDDING FOR TALENT IN SPORT (2019) Downloads
Working Paper: Bidding for Talent in Sport (2016) Downloads
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