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Teaching Competition in Professional Sports Leagues

Author

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  • Stefan Szymanski
Abstract
In recent years, there has been some dispute over the appropriate way to model decision making in professional sports leagues. In particular, Szymanski and Késenne (2004) argue that formulating the decision-making problem in a noncooperative game leads to radically different conclusions about the nature of competition in sports leagues. The author describes a simulation model that can be used in a classroom to demonstrate how competition works in a noncooperative context. More generally, in simulation exercises, students typically gravitate quickly toward the Nash equilibrium, making this a simple and powerful way to introduce them to the concept. The supporting Excel spreadsheet used to conduct the game can be downloaded from the author's personal Web page, http://www.cass.city.ac.uk/faculty/s.szymanski/sports -league-simulation-blank.xls .

Suggested Citation

  • Stefan Szymanski, 2010. "Teaching Competition in Professional Sports Leagues," The Journal of Economic Education, Taylor & Francis Journals, vol. 41(2), pages 150-168, March.
    • Handle: RePEc:taf:jeduce:v:41:y:2010:i:2:p:150-168
    DOI: 10.1080/00220480903382297
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    References listed on IDEAS

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    1. Scott E. Atkinson & Linda R. Stanley & John Tschirhart, 1988. "Revenue Sharing as an Incentive in an Agency Problem: An example from the National Football League," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 27-43, Spring.
    2. Stefan Szymanski & Stefan Késenne, 2010. "Competitive Balance and Gate Revenue Sharing in Team Sports," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 7, pages 229-243, Palgrave Macmillan.
    3. Stefan Szymanski, 2010. "The Economic Design of Sporting Contests," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 1, pages 1-78, Palgrave Macmillan.
    4. Daniel R. Marburger, 1997. "Gate Revenue Sharing And Luxury Taxes In Professional Sports," Contemporary Economic Policy, Western Economic Association International, vol. 15(2), pages 114-123, April.
    5. Stefan Kesenne, 2000. "Revenue Sharing and Competitive Balance in Professional Team Sports," Journal of Sports Economics, , vol. 1(1), pages 56-65, February.
    6. Stefan KÉsenne, 2004. "Competitive Balance and Revenue Sharing," Journal of Sports Economics, , vol. 5(2), pages 206-212, May.
    7. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
    8. El-Hodiri, Mohamed & Quirk, James, 1971. "An Economic Model of a Professional Sports League," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1302-1319, Nov.-Dec..
    9. Stefan Szymanski, 2006. "Tilting the Playing Field: Why a sports league planner would choose less, not more, competitive balance," Working Papers 0620, International Association of Sports Economists;North American Association of Sports Economists.
    10. Stefan Szymanski, 2004. "Professional Team Sports Are Only a Game," Journal of Sports Economics, , vol. 5(2), pages 111-126, May.
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    Cited by:

    1. Paul Madden, 2015. "“Walrasian Fixed Supply Conjecture†Versus “Contest-Nash†Solutions to Sports League Models," Journal of Sports Economics, , vol. 16(5), pages 540-551, June.
    2. Paul Madden, 2017. "Comment on Driskill and Vrooman," Journal of Sports Economics, , vol. 18(3), pages 271-281, April.
    3. Paul Madden, 2011. "Game Theoretic Analysis of Basic Team Sports Leagues," Journal of Sports Economics, , vol. 12(4), pages 407-431, August.

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    More about this item

    JEL classification:

    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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