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It’s Not Over ‘til the Fat Lady Sings

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  • Robert Driskill
  • John Vrooman

Abstract

There have been major disputes about the appropriate game-theoretic analyses of sports leagues. The basic sports-league model assumes a two-team league where each team is seen as a monopolist in its product market and a passive price taker in a duopsony talent market. For simplicity, these models assume talent supply is either perfectly inelastic or perfectly elastic. It has been argued that perfectly inelastic supply is ill suited for duopsony analysis. This article solves the problem of multiple equilibria by proposing a selection criterion that finds a unique equilibrium in a duopsony limit game as talent supply approaches perfect inelasticity.

Suggested Citation

  • Robert Driskill & John Vrooman, 2016. "It’s Not Over ‘til the Fat Lady Sings," Journal of Sports Economics, , vol. 17(4), pages 354-376, May.
    • Handle: RePEc:sae:jospec:v:17:y:2016:i:4:p:354-376
    DOI: 10.1177/1527002514532928
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    References listed on IDEAS

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    1. Helmut M. Dietl & Markus Lang & Stephan Werner, 2009. "Social Welfare in Sports Leagues with Profit‐Maximizing and/or Win‐Maximizing Clubs," Southern Economic Journal, John Wiley & Sons, vol. 76(2), pages 375-396, October.
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    6. Helmut M. Dietl & Markus Lang & Stephan Werner, 2009. "Social Welfare in Sports Leagues with Profit-Maximizing and/or Win-Maximizing Clubs," Southern Economic Journal, John Wiley & Sons, vol. 76(2), pages 375-396, October.
    7. Fershtman, Chaim & Kamien, Morton I, 1990. "Turnpike Properties in a Finite-Horizon Differential Game: Dynamic Duopoly with Sticky Prices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 49-60, February.
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    10. Rodney Fort & Jason Winfree, 2009. "Sports Really are Different: The Contest Success Function and the Supply of Talent," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 34(1), pages 69-80, February.
    11. Paul Madden, 2010. "The regulation of a large sports league," Economics Discussion Paper Series 1007, Economics, The University of Manchester.
    12. John Vrooman, 2007. "Theory Of The Beautiful Game: The Unification Of European Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 314-354, July.
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    Cited by:

    1. 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.
    2. John Vrooman, 2015. "Sportsman Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(1), pages 90-115, February.
    3. Robert Driskill & John Vrooman, 2017. "Talent Versus Payroll as Strategic Variables in Game Theoretic Models of Sports Leagues," Journal of Sports Economics, , vol. 18(6), pages 638-646, August.
    4. Paul Madden, 2017. "Comment on Driskill and Vrooman," Journal of Sports Economics, , vol. 18(3), pages 271-281, April.

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