Article

Theory of the Big Dance

John Vrooman

in The Oxford Handbook of Sports Economics

Published in print April 2012 | ISBN: 9780195387773
Published online September 2012 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780195387773.013.0004

Series: Oxford Handbooks

 Theory of the Big Dance

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This chapter covers the economic aspects of championship playoffs, and the nexus of the regular season and the post-season in the four major North American professional sports leagues and the English Premier League (EPL). The parameters of the champion effect are isolated, and the playoff structures and payoffs to the teams and players are compared for each of the sports leagues. The chapter explores the internal contradiction of the post-season. Although the results increase the risk and lower the expected payoff of the champion effect, particularly for Major League Baseball (MLB), they also suggest an optimum playoff strategy for profit-maximizing owners. The most likely candidates for the champion effect are MLB and EPL, with reservations about the uncertainty of MLB's short playoffs and the symmetry of EPL/UEFA Champions' League qualification and relegation. Winning during the regular season is talent driven, and winning in the post-season is riskier business.

Keywords: regular season; post-season; English Premier League; Major League Baseball; National Football League; National Basketball Association; National Hockey League; champion effect; playoff

Article.  9571 words. 

Subjects: Economics ; Industry Studies ; Financial Institutions and Services

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