“Competitive Balance in a Professional Sports League: A Simulation Exercise”

The Business of Sport – Seminar Series

Room G01 – Clore Management Centre, Birkbeck College, Torrington Square, London WC1 7HX

Wednesday 16th April 2008 at 6pm
(For directions click here)

“Competitive Balance in a Professional Sports League: A Simulation Exercise”

Given by:

Professor Stefan Szymanski, Cass Business School

Synopsis:

The operation of economic competition between clubs in a sports league has been hotly debated by academics and policy makers in recent years. Conventional wisdom has it that economic inequalities will lead to a sporting competition that is so unbalanced that the league as a whole will suffer. On this basis redistributive policies are advocated in order to make competition more balanced and therefore more attractive. Using the standard economic model of a contest it is possible to construct a simulation exercise in which participants can play the role of club managers/owners, deciding how much to spend on purchasing talent in a non-cooperative environment. The simulation exercise can be played over several rounds. This exercise illustrates the concept of a Nash equilibrium and highlights some interesting properties of the competitive equilibrium that do not accord with the conventional wisdom.

Reading:

Professor Szymanski’s most recent working papers on sports economics can be found here

For further details on this Seminar Series contact:

Sean Hamil
Department of Management
Birkbeck College
Malet Street
London
WC1E 7HX

Email: s.hamil@bbk.ac.uk or Tel: 020-7631 6763