Teaching Competition in Professional Sports Leagues

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 .