Chapter 5 book competitive balance

Answer 1

the model for compettive balance

Question 2

fans dont want their teams to lose 30-40% of the time, but the chance of losing makes the game more interesting ans stimulates demand

Answer 2

unexpected outcome hypothesis

Answer 3

market attrubutes contributing to competitive balance

Question 4

does free agency increase or decrease competitive balance

Answer 4

increase

Answer 5

competitive balance model-label AR, MR, P, Winp, Payroll

Answer 6

use competitive balence model to model luxury tax, max contracts, etc.

Question 7

as long as rights are allocated, and markets with minimal transaction costs exist, goods/services go to those who value them the most

Answer 7

Invariance principle

Question 8

NFL shares gate _____, TV evenly
NBA ____ of basketball related revenue
MLN ____ of local revenue

Answer 8

NFL 60/40
NBA 50%
MLB 31%

Question 9

strict limit on pay
by itself can make things worse

Answer 9

salary caps

Question 10

• penalty for going above some point
• has effects on balance

Answer 10

luxury tax

Question 11

-worst team gets top pick
-value of a draft pick comes from discounted production

Answer 11

reverse order draft