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OPTIMAL COMPETITIVE BALANCE IN A SEASON TICKET LEAGUE
Author(s) -
FORT RODNEY,
QUIRK JAMES
Publication year - 2011
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2010.00264.x
Subject(s) - economics , league , revenue , balance (ability) , microeconomics , marginal profit , ticket , profit (economics) , marginal revenue , welfare , marginal cost , market economy , finance , computer science , medicine , physics , computer security , astronomy , physical medicine and rehabilitation
Theory predicts that a planner maximizing the sum of fan and owner surpluses from a league dominated by season ticket sales may prefer more, less, or the same level of competitive balance produced by a league of profit‐maximizing owners. The optimal level of balance depends on the relationship between marginal impacts of talent rearrangements in larger‐revenue and smaller‐revenue markets. Ultimately, then, judging whether an increase in balance enhances welfare rests on careful and thorough empirical investigation. Our reading of the literature and the policy debate shows that this careful work remains to be done. ( JEL D6, L83)