To the highest bidder: The market for talent in sports leagues.

Jozsef Sakovics, Roberto Burguet

Research output: Working paperDiscussion paper

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, unspecified club objective, incorporating both pecuniary and non-pecuniary benefits.
Original languageEnglish
PublisherEdinburgh School of Economics Discussion Paper Series
Publication statusPublished - 2016

Publication series

NameESE Discussion Papers
No.275

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  • To the highest bidder

    Jozsef Sakovics (Invited speaker)

    2 Oct 2017

    Activity: Participating in or organising an event typesParticipation in workshop, seminar, course

  • EARIE Annual Conference

    Jozsef Sakovics (Speaker)

    27 Aug 2016

    Activity: Participating in or organising an event typesParticipation in conference

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