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Bidding For Talent In Sport

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  • Roberto Burguet
  • József Sákovics

Abstract

We present a novel microstructure for the market for athletes. Clubs simultaneously target bids at the players, in (Nash) equilibrium internalizing whether—depending on the other clubs' bids—a player not hired would play for the competition. When talent is either scarce or has low outside options, we support—and generalize to heterogeneous players—the Coasian results of Rottenberg (1956) and Fort and Quirk (1995): talent allocation is efficient and independent of initial “ownership” and revenue sharing arrangements. We also characterize equilibria when talent is abundant (or has a high outside option). The analysis uses a nonspecific club objective with an endogenously derived trade‐off between pecuniary and nonpecuniary benefits.(JEL J4, L1, L2)

Suggested Citation

  • Roberto Burguet & József Sákovics, 2019. "Bidding For Talent In Sport," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 85-102, January.
    • Handle: RePEc:bla:ecinqu:v:57:y:2019:i:1:p:85-102
    DOI: 10.1111/ecin.12712
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    Cited by:

    1. Rachel Scarfe & Carl Singleton & Adesola Sunmoni & Paul Telemo, 2024. "The age‐wage‐productivity puzzle: Evidence from the careers of top earners," Economic Inquiry, Western Economic Association International, vol. 62(2), pages 584-606, April.
    2. Paul Madden, 2018. "Collective Bargaining in a Basic North American Sports League Model," Economics Discussion Paper Series 1812, Economics, The University of Manchester.
    3. Paul Madden, 2019. "Collective Bargaining in a Basic North American Sports League Model With Broadcasting Revenue," Journal of Sports Economics, , vol. 20(8), pages 1088-1118, December.
    4. Vohra, Akhil, 2023. "Losing money to make money: The benefits of redistribution in collective bargaining in sports," Games and Economic Behavior, Elsevier, vol. 142(C), pages 226-242.
    5. Burguet, Roberto & Sákovics, József, 2019. "Personalized prices and uncertainty in monopsony," International Journal of Industrial Organization, Elsevier, vol. 67(C).

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    More about this item

    JEL classification:

    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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