The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Sports, Economics of

  • Stefan Szymanski
  • Andrew Zimbalist
Reference work entry


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.


Antitrust policy Baseball Coase theorem Competitive balance Marginal revenue product Rents Sport, economics of Tournaments 

JEL Classifications

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Stefan Szymanski
    • 1
  • Andrew Zimbalist
    • 1
  1. 1.