Sports, Economics of
The economic analysis of professional sport proceeds from the uncertainty of outcome and competitive balance. Members of sports leagues seek to restrain economic competition and claim that they need to do so in order to make contests more attractive. In 1956 Rottenberg analysed this ‘competitive balance defence’, arguing that the reserve clause would not have an effect on the distribution of playing talent in a league, since players would migrate to teams where their economic return was highest, regardless of whether the club or the player owned the right to the revenue stream.
KeywordsAntitrust policy Baseball Coase theorem Competitive balance Marginal revenue product Rents Sport, economics of Tournaments
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