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If You Don'T Like The Outcome, Change The Contest

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  • Jason A. Winfree

Abstract

This article analyzes contests when contestants derive heterogeneous benefits from winning and investments are seen as costs to the contest designer. An example of this is sports leagues maximizing league profits. For sports leagues, optimal contests depend upon the heterogeneity of market sizes and the impact of team investment on winning. Sports leagues have mechanisms to change the structure of contests, implying they have some control of the expected payoff of teams, the value of the athletes, and the balance of the league. Data from Major League Baseball and the National Basketball Association are used to empirically estimate the model. (JEL C72, L10, L83)

Suggested Citation

  • Jason A. Winfree, 2021. "If You Don'T Like The Outcome, Change The Contest," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 329-343, January.
    • Handle: RePEc:bla:ecinqu:v:59:y:2021:i:1:p:329-343
    DOI: 10.1111/ecin.12946
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    1. Bruckner, Dominik & Sahm, Marco, 2023. "Party Politics: A Contest Perspective," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277714, Verein für Socialpolitik / German Economic Association.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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