Week 2 Flashcards
How has sports evolved over time?
Sports have existed since ancient times but gained significant prominence and professionalism in the past 200 years.
What factors contributed to the development of modern sports?
Industrialization: Increased leisure time and disposable income.
Urbanization: Creation of large fan bases and facilities.
Technological advancements: Improved equipment and broadcasting.
Economic incentives: Professional leagues and sponsorships.
Why is understanding sports development important?
It helps predict future trends in the sports industry.
What is the Uncertainty of Outcome Hypothesis (UOH)?
The UOH suggests that the unpredictability of a game’s outcome increases fan interest and engagement.
What happens if games are too predictable?
Audience enthusiasm may decline.
How do successful leagues maintain competitive balance?
By ensuring no single team consistently dominates.
How does competitive balance relate to UOH?
Competitive balance prevents dominance by a single team.
It is measured using win percentage distribution, revenue and salary disparities, and championship distribution over time.
What does competitive balance mean in sports?
It refers to the degree to which teams have an equal chance of success.
Why is competitive balance important?
The UOH suggests that a certain level of balance is desirable for fan engagement and league popularity.
How is competitive balance analyzed?
By using observable metrics.
What are some challenges in measuring competitive balance?
Standard deviation of win percentage may not fully capture balance.
League structure and financial disparities can affect results.
What are the two types of competitive balance measures?
Within-season balance: Measures variability in performance within a single season.
Across-season balance: Examines long-term parity among teams over multiple seasons.
What is the most common metric for within-season balance?
The Noll-Scully Ratio (or Noll-Scully Measure).
How does competitive balance impact sport popularity?
Anecdotes suggest it affects sport popularity (e.g., Yankees’ dominance in the 1950s).
However, studies indicate its impact may not be as significant as expected.
What did Humphreys (2002) study reveal?
Examined the impact of competitive balance on baseball attendance over 100 years.
Controlled for population growth, TV rise, and league expansion.
Found Noll-Scully and other measures had minimal statistical significance.
Competitive balance changes led to only a 4,000 increase in fans per game.
What did the Gooding & Stephenson (2017 JSE) study conclude?
Analyzed the Uncertainty of Outcome Hypothesis in the PGA Tour.
Found little impact of outcome uncertainty on TV ratings.
However, Tiger Woods’ performance boosted ratings by 50%, showcasing the ‘superstar effect’.
How do newer studies challenge traditional competitive balance theories?
Research by Coates, Humphreys, and Zhou suggests that reference-dependent preferences and loss aversion affect game attendance.
Fans may not value competitive uncertainty equally but instead react based on expectations.
MLB data supports the loss aversion version of UOH, rather than the classic version.
What mechanisms are used to maintain competitive balance in professional sports?
Salary caps: Limits total player salaries per team.
Revenue sharing: Redistributes income among teams to promote parity.
Reverse order draft: Weaker teams get priority in selecting new players.
Luxury tax: Penalizes teams exceeding salary limits.
Roster limits: Restricts team size to maintain balance.
Free agency rules: Regulates player movement between teams.
Open vs. closed leagues: Different structures affecting team competition levels.
Why are these mechanisms important?
They prevent dominance by a few teams and create a more competitive environment.
