This paper applies contest theory to provide an integrated framework of a team sports league and analyses the competitive interaction between clubs. We show that dissipation of the league revenue arises from `overinvestment' in playing talent as a direct consequence of the ruinous competitive...

This paper provides a theoretical model of a team sports league based on contest theory and studies the welfare effect of gate revenue-sharing. It derives two counter-intuitive results. First, it challenges the "invariance proposition" by showing that revenue-sharing reduces competitive balance...

In the December 2002 issue of the American Economic Review, Mark Duggan and Steven D. Levitt published an article on corruption in professional sumo. In the present paper, we update Duggan and Levitt's study to take into account changes since January 2000. We find strong statistical evidence...

The transfer system imposed by the football governing bodies on employment relations made sure that a player could not leave his current club and sign with another club without the current club's explicit consent. The 1995 Bosman judgement of the European Court of Justice declaring football...

Comparisons between European and North American sports leagues have occurred over the years. In this paper, we attempt to bring these comparisons down to the essential elements – what has come to be called Rottenberg's (1956) invariance principle and theoretical insights into attempts to alter...

In this paper, we discuss a manager's allocation problem. Two managers allocate their heterogeneous employees - each manager allocates two high types and two low types - in groups of two in order to compete for an exogenous contest prize in a two period model. There are three possibilities of...

This paper provides a game-theoretic model of a professional sports league and analyzes the effect of luxury taxes on competitive balance, club profits and social welfare. We show that a luxury tax increases aggregate salary payments in the league as well as produces a more balanced league....

This article provides a standard "Fort and Quirk"-style model of a professional team sports league and analyzes the combined effect of salary restrictions (caps and floors) and revenue-sharing arrangements. It shows that the invariance proposition does not hold even under Walrasian conjectures...

This paper studies the welfare effect of a percentage-of-revenue salary cap in a European context with win-maximizing clubs. It shows that a percentage-of-revenue cap increases competitive balance and decreases the overall salary payments in the league, therefore contributing to financial...