Abstract
The conventional model of a team sports league is based on the North American major leagues which have a fixed number of members, entry is rare and only granted by permission of the incumbents (the closed system). European soccer leagues operate a system of promotion and relegation, effectively permitting entry on merit to all-comers (the open system). This paper examines the impact of openness on the incentive of teams to invest (expend effort) and share resources (redistribution) in the context of a Tullock contest. The main conclusion of the paper is that openness tends to enhance effort incentives, but diminishes the incentive to share income.
JEL Codes: L83, P51.
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© 2010 Stefan Szymanski and Tommaso M. Valletti
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Szymanski, S., Valletti, T.M. (2010). Promotion and Relegation in Sporting Contests. In: The Comparative Economics of Sport. Palgrave Macmillan, London. https://doi.org/10.1057/9780230274273_6
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DOI: https://doi.org/10.1057/9780230274273_6
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