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Competitive Balance when Teams have Different Goals

Nicola Giocoli

Department of Law

October 2, 2006

In the standard two-team model of professional league sports it is shown that if teams have different objectives (the maximization of, respectively, wins and profits) the competitive balance conditions get worse with respect to the case when teams share the same goal. A similar, though less clear-cut, result obtains in the three-team setup. These outcomes call for policy measures to restore the balance. Three such measures are examined here: market-size-based revenue sharing, general salary cap and team-specific salary cap. It is shown that, contrary to the same-goal-for-all case, each of them may bring more intra-league competition.

Number of Pages in PDF File: 27

Keywords: Team sports economics, competitive balance, invariance proposition, Italian football

JEL Classification: D29, L21, L83

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Date posted: October 8, 2006  

Suggested Citation

Giocoli, Nicola, Competitive Balance when Teams have Different Goals (October 2, 2006). Available at SSRN: https://ssrn.com/abstract=935336 or http://dx.doi.org/10.2139/ssrn.935336

Contact Information

Nicola Giocoli (Contact Author)
Department of Law ( email )
via Collegio Ricci 10
Pisa PI, 56126
HOME PAGE: http://https://pisa.academia.edu/NicolaGiocoli
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