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Who Should Pay the Sports Agent’s Commission? An Economic Analysis of Setting the Legal Rules in the Regulation of Matchmakers

Author

Listed:
  • Brocard, Jean-François
  • Cavagnac, Michel
Abstract
We study the effects of completing the legal framework of matchmakers with a rule designating which party must pay the commission. The paper examines the two rules currently open to debate at the international level in sport: the "player-pays" principle and the "club-pays" principle. We find that the most appropriate measure entails designating the party with the lesser bargaining power to pay the intermediary’s fee. However, our main result indicates that the appropriateness of imposing an additional rule in the legal framework is a preliminary issue. Indeed, even if the best rule is chosen, welfare may be decreased by this legal initiative.

Suggested Citation

  • Brocard, Jean-François & Cavagnac, Michel, 2012. "Who Should Pay the Sports Agent’s Commission? An Economic Analysis of Setting the Legal Rules in the Regulation of Matchmakers," TSE Working Papers 13-391, Toulouse School of Economics (TSE), revised Nov 2016.
  • Handle: RePEc:tse:wpaper:27145
    as

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    File URL: http://www.tse-fr.eu/sites/default/files/medias/doc/by/cavagnac/middlemen.pdf
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    References listed on IDEAS

    as
    1. Wladimir Andreff & Stefan Szymanski (ed.), 2006. "Handbook on the Economics of Sport," Books, Edward Elgar Publishing, number 3274.
    2. Gehrig, Thomas, 1993. "Intermediation in Search Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(1), pages 97-120, Spring.
    3. Wladimir Andreff & Stefan Szymanski, 2006. "Handbook on the Economics of Sport," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00270122, HAL.
    4. Alok Johri & John Leach, 2002. "Middlemen and the Allocation of Heterogeneous Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 347-362, May.
    5. Yavas, Abdullah, 1992. "Marketmakers versus matchmakers," Journal of Financial Intermediation, Elsevier, vol. 2(1), pages 33-58, March.
    6. Gary Biglaiser, 1993. "Middlemen as Experts," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 212-223, Summer.
    7. Li, Yiting, 1998. "Middlemen and private information," Journal of Monetary Economics, Elsevier, vol. 42(1), pages 131-159, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Sport intermediaries; Matching; Regulation through rules; Legal framework for contracts;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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