Existing evidence shows that decision makers’ social ties to internal co-workers can lead to reduced firm performance. In this article, we show that decision makers’ social ties to external transaction partners can also hurt firm performance. Specifically, we use 34 years of data from the...

We introduce agency concerns to social capital theory and predict that managers can use individual social capital to reduce personal effort costs, which is not in the best interest of the firm. To test this prediction, we collect data on all 8,019 hiring decisions from general managers in the...

Obwohl die Bundesliga in dem potentiell attraktivsten europäischen Fussballmarkt operiert, ziehen ihre Klubs in der Champions League vor allem gegen die Konkurrenten aus der Premier League systematisch den Kürzeren. Weil Überinvestition gerade nicht durch eine Auflösung der betroffenen Klubs...

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...

Historically, European team sports leagues were run by their respective national and international associations and were legally independent from the professional clubs playing in these leagues. Recently, European leagues have adopted an organizational form similar to their North American...

In order to avoid too many tied games after playing the five-minute overtime period, the National Hockey League introduced two rule changes in the 1999-2000 season. First, a team that loses in overtime receives one point instead of zero points. Second, the number of skaters in overtime is...

This paper develops a model of a professional sports league with network externalities by integrating the theory of two-sided markets into a contest model. In professional team sports, the competition of the clubs functions as a platform that enables sponsors to interact with fans. In these...

This paper studies the relationship between talent disparity and team productivity based on panel data from German soccer teams. Holding average ability and unobserved team heterogeneity constant, we find evidence that the players selected to play on the competition team should be rather...

This paper outlines and compares the organizational structure of major sports leagues, explores the reasoning behind their formation, and derives implications for salary caps in European football. To understand why sports leagues have developed a specific organizational structure, one must take...

This paper analyzes the effects of a percentage-of-revenue salary cap in a team sports league with win-maximizing clubs and flexible talent supply. It shows that a percentage-of-revenue cap produces a more balanced league and decreases aggregate salary payments. Taking into account the...