Most articles on sports economics presume the well-known Nash equilibrium concept. In this article, however, we apply evolutionary game theory in a sports-contest model. If clubs follow evolutionarily stable strategies (ESS), then ESS generate greater investments and smaller profits than...

This article describes a large number of contestants with high and low levels of talent who individually decide to enter a contest or take their heterogeneous outside options. We derive a critical condition for which only high types, only low types or both types participate in the contest. If a...

This paper presents a two-period model of talent investments in which two clubs compete for a contest prize. We show that multiple equilibria are possible, using a closed-loop approach with strictly convex costs: The large-market club invests in both periods more than the small-market club or...

This article presents a model of talent investments where two clubs compete for prizes. Our model is based on a general class of cost functions with a constant elasticity of marginal costs with respect to investments. The analysis finds that reduced revenue sharing improves competitive balance....

In this article, contestants play with a certain probability in Contest A and with the complementary probability in Contest B. This situation is called contest uncertainty. In both contests, effort is additively distorted by a contest noise parameter which affects the sensitivity of the contest...

type="main" xml:id="sjpe12060-abs-0001" <title type="main">Abstract</title> <p>This paper analyzes spillover effects in sports leagues that are embedded in a system of promotion and relegation. Based on a contest model of a professional sports league with a top division and a second division, we show that league prizes and...</p>

Professional sports leagues have witnessed the appearance of sugar daddies - people who invest enormous amounts of money in clubs and become their owners. This paper presents a contest model of a professional sports league that incorporates this phenomenon. We analyze how the appearance of a...

This paper develops a contest model of a professional sports league in which clubs maximize a weighted sum of profits and wins (utility maximization). The model analyzes how more win-oriented behavior of certain clubs affects talent investments, competitive balance, and club profits. Moreover,...

In this paper, an extensive portfolio optimisation case study is conducted. For this, in a first step, a Markov-Switching model is estimated to time series of three global stock indices. The estimation includes a new methodology for the search for realistic initial values and a large number of...