Economics of League Design

Stefan Szymanski

in The Oxford Handbook of Sports Economics

Published in print April 2012 | ISBN: 9780195387773
Published online September 2012 | | DOI:

Series: Oxford Handbooks

Economics of League Design

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This chapter examines the implications of the closed and open league systems for economic performance. It also describes the distinction between sporting competition and economic competition, the objectives of league organizers, and the general implications of open versus closed leagues in professional sport. The chapter then addresses the economic theory of contests and the insights of the theory for promotion and relegation. Moreover, some of the practical implications of open and closed leagues are explained. The insights presented from contest theory can be used to think about the comparison of open and closed systems in practice. It might almost seem that, although the open systems punish failure, the closed systems reward it. There still remains relatively little research into the practical implications of the two systems, and there is scope for more work, both on the theory and the empirical side.

Keywords: closed league systems; open league systems; sporting competition; economic competition; professional sport; economic theory; promotion; relegation

Article.  7092 words. 

Subjects: Economics ; Industry Studies ; Financial Institutions and Services

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