Managerial Efficiency in German Top League Soccer: An Econometric Analysis of Club Performances On and Off the Pitch

Abstract. This study applies stochastic frontier analytic techniques in the estimation of sporting production functions. As ex-ante input factors, we use pre-seasonal estimates of wage bills of players and coaches that are transformed during the production process of a season into ex-post pecuniary revenues and sporting success. In the case of athletic output we find a robust pattern of technical efficiency over subsequent seasons. Estimates based on economic output, however, do not support an efficiency model. A significant inter-seasonal change in overall technical productivity rather highlights the economic instability of the German soccer industry.     

Working under pressure: Evidence from the impacts of soccer fans on players’ performance

In this paper we study how pressure affects individual’s behavior. For this purpose we use sports data, where the attendance is a proxy for pressure, to investigate if the number of fans in the stadium affects the performance of the players. We overcome the reverse causality problem by proposing an instrument variable: a promotion in Brazil during which low cost tickets were assigned to random soccer matches. In contrast to previous literature, our results suggest that pressure does not significantly affect players’ behavior.     

A note on free entry under uncertainty: The role of asymmetric information

In a model of competing managerial firms I show that the equilibrium number of firms decreases with uncertainty if entry is relatively more costly than monitoring. The result adds to the earlier contributions and is consistent with the available evidence.     

An experimental analysis of the bandit problem

Summary.  We investigate, in an experimental setting, the behavior of single decision makers who at discrete time intervals over an “infinite” horizon may choose one action from a set of possible actions where this set is constant over time, i.e. a bandit problem. Two bandit environments are examined, one in which the predicted behavior should always be myopic (the two-armed bandit) and the other in which the predicted behavior should never be myopic (the one-armed bandit). We also investigate the comparative static predictions as the underlying parameters of the bandit environments are changed. The aggregate results show that the behavior in the two bandit environments are quantitatively different and in the direction of the theoretical predictions. Received: October, 27, 1994; revised version February 27, 1996     

Speed and quality of collective decision making: Imperfect information processing

This paper studies efficient programmed hierarchies as introduced by Radner [The organization of decentralized information processing, Econometrica 61(5) (1993) 1109-1146] in which agents cannot process information perfectly. A group of P identical managers has to make a choice between n alternatives. In order to learn which is the best option, the alternatives have to be compared. The evaluation of an alternative takes time and managers are only able to identify the better one of two alternatives with a positive probability. The skip-level reporting tree proposed by Radner is found to be efficient in terms of the dimensions decision cost, decision delay, and decision quality.     

突发事件下个体抢购物品现象的经济学分析

利用前景理论建立突发事件下信息对个体心理预期影响的理论模型,可对危机中的“抢购”行为进行理论分析。结果表明:危机事件下的“抢购”行为直接与人们的心理预期有关;私人信息会影响个体心理预期并产生过度反应;尽早公开信息有利于遏制私人信息影响;信息对个体风险感知的影响取决于个体接受信息的状态。     

Bounded governance within extended order: The Confucian advantage of synergy under generalized constitutional rules

A constitutional explanation of the economic dynamism of the East Asian Confucian economies is proposed. The main hypothesis is that the synergy between the extended order of generalized rules, first introduced by Western civilization, and the bounded governance of Confucian societies has produced a comparative cultural and institutional advantage for the five tigers in East Asia. As a pure form, the extended order, represented in Western society by a system of private property rights, a system of impersonal and generalized markets and a formal-rational system of law and administration, is far more efficient than the bounded governance of Confucian societies in the East Asia, which is characterized by the particularistic human relations and familistic, clannish, and other forms of personal ties and connections. Nevertheless, once a linkage to the extended order is established—overcoming the limits of personal exchange—Confucian ethics can support the bounded governance structures of clans, networks, communities, and familistic corporations that are effective in governing those complex tasks in which property rights are difficult to divide and allocate, individual performance is difficult to measure, and complete contract is either difficult to make or hard to enforce.     

Flooding risk and housing values: An economic assessment of environmental hazard

Climate change, the ‘boom and bust’ cycles of rivers, and altered water resource management practice have caused significant changes in the spatial distribution of the risk of flooding. Hedonic pricing studies, predominantly for the US, have assessed the spatial incidence of risk and the associated implicit price of flood risk. Using these implicit price estimates and their associated standard errors, we perform a meta-analysis and find that an increase in the probability of flood risk of 0.01 in a year is associated to a difference in transaction price of an otherwise similar house of - 0.6%. The actual occurrence of a flooding event or increased stringency in disclosure rules causes ex-ante prices to differ from ex-post prices, but these effects are small. The marginal willingness to pay for reduced risk exposure has increased over time, and it is slightly lower for areas with a higher per capita income. We show that obfuscating amenity effects and risk exposure associated with proximity to water causes systematic bias in the implicit price of flood risk.     

Learning dynamics for mechanism design: An experimental comparison of public goods mechanisms

In a repeated-interaction public goods economy, incomplete information and dynamic behavior may affect the realized outcomes of mechanisms known to be efficient in a complete information one-shot game. An experimental test of five public goods mechanisms indicates that subjects with private information appear to best respond to recent observations. This provides predictions about which mechanisms will generate convergence to their efficient equilibrium allocations. These predictions match the experimental result that globally stable efficient mechanisms realize the highest efficiency in practice. The simplicity of the suggested best response model makes it useful in predicting stability of mechanisms not yet tested.     

Testing the TASP: An experimental investigation of learning in games with unstable equilibria

We report experiments studying mixed strategy Nash equilibria that are theoretically stable or unstable under learning. The Time Average Shapley Polygon (TASP) predicts behavior in the unstable case. We study two versions of Rock-Paper-Scissors that include a fourth strategy, Dumb. The unique Nash equilibrium is identical in the two games, but the predicted frequency of Dumb is much higher in the game where the NE is stable. Consistent with TASP, the observed frequency of Dumb is lower and play is further from Nash in the high payoff unstable treatment. However, Dumb is played too frequently in all treatments.     

Mixed Motives: An Empirical Analysis of ILO Roll-Call Voting

In this empirical paper, we look at individual voting behaviour of government delegates to the International Labour Organization (ILO). We distinguish between the instrumental motive for voting, which consists in the chance that one's vote may turn the balance in favour of one's preferred outcome, and non-instrumental motives, such as a desire for good reputation. Empirically, the two can be identified because two alternatives, abstaining and not participating in the vote, do not differ in their instrumental value, but are likely to differ with respect to reputation aspects. The model is estimated by a multinomial logit with country-specific unobserved heterogeneity, using roll-call votes on the final passage of ILO conventions from 1977 to 1995. The hypothesis that voting is only instrumental is clearly rejected by the data.     

Correcting for the Missing Rich: An Application to Wealth Survey Data

It is a well‐known criticism that if the distribution of wealth is highly concentrated, survey data are hardly reliable when it comes to analyzing the richest parts of society. This paper addresses this criticism by providing a general rationale of the underlying methodological problem as well as by proposing a specific methodological approach tailored to correcting the arising bias. We illustrate the latter approach by using Austrian data from the Household Finance and Consumption Survey. Specifically, we identify suitable parameter combinations by using a series of maximum‐likelihood estimates and appropriate goodness‐of‐fit tests to avoid arbitrariness with respect to the fitting of the Pareto distribution. Our results suggest that the alleged non‐observation bias is considerable, accounting for about one quarter of total net wealth in the case of Austria. The method developed in this paper can easily be applied to other countries where survey data on wealth are available.     

The Impact of Transfer Fees on Professional Sports: An Analysis of the New Transfer System for European Football*

We evaluate the effect of the recently approved transfer system for European professional football which will replace the current system (implemented by the Bosman judgment in 1995). The focus is on the comparison of wages, profits, the length of contracts and investment incentives. Our main findings are that (i) the new regime reduces a player's overall payoff because it increases the new club's renegotiation payoff, and (ii) since training generates a general skill, the new regime will also diminish incentives to invest in the education of young talents, because a new club benefits more from the initial club's investment.     

Inequality foundations of concentration measures: An application to the Hannah-Kay indices

The aim of this paper is to provide a connection between concentration and inequality. In particular, we show that the general entropy inequality indices are, among inequality measures, those consistent with the whole set of Hannah-Kay concentration indices. We isolate the inequality component underlying concentration measures, obtaining an explicit additive decomposition of the change in concentration into the change in its two components, i.e., inequality and the number of firms. This relationship proves to be valid for the whole set of Hannah-Kay concentration indices, and embodies as particular cases some others previously found in the literature. We are particularly grateful to Emilio Cerdá for helpful comments on the mathematical formulation of the paper. The second author also acknowledges support through the European Commission Project #ERBCHRXCT980248.     

ENDOGENOUS TIMING AND STRATEGIC CHOICE: THE COURNOT‐BERTRAND MODEL

Cournot establishes a Nash equilibrium to a duopoly game under output competition; Bertrand finds a different Nash equilibrium under price competition. Both treat the strategic choice variable (output versus price) and the timing of play as exogenous. We investigate Cournot‐Bertrand models where one firm competes in output and the other competes in price in both static and dynamic settings. We also develop a general model where both the timing of play and the strategic choice variables are endogenous. Consistent with the conduct of Honda and Scion, we show that Cournot‐Bertrand behaviour can be a Nash equilibrium outcome.     

PRICE AND QUANTITY COMPETITION WITH ASYMMETRIC COSTS IN A MIXED DUOPOLY: A TECHNICAL NOTE

We consider a mixed duopoly in which private and public firms can choose to strategically set prices or quantities when the public firm is less efficient than the private firm. Thus, even with cost asymmetry, we obtain exactly the same result (i.e., Bertrand competition) of Matsumura and Ogawa (2012) if Singh and Vives’ (1984) assumption of positive primary outputs holds. However, compared to endogenous determination of the type of contract without cost asymmetry, our main finding is that in the wider range of cost asymmetry, different type(s) of equilibrium related to or not related to the limit‐pricing strategy of the private firm can be sustained. Thus, when considering an implication on privatization, we may overestimate the welfare gain of privatization because Cournot competition takes place after privatization even though cost asymmetry exists between firms. While the result of Matsumura and Ogawa (2012) holds true if the goods are complements, we find the novel results in the case of substitutes.     

Design of the 3G Spectrum Auctions in the UK and Germany: An Experimental Investigation

Abstract. This paper analyses the auction designs chosen for awarding 3G licences in the UK and Germany and compares them with respect to revenues and bidders' surplus using a laboratory experiment. In our study with a given number of bidders, the German design leads to higher revenues. However, bidder surplus in the German design is lower and bidders face a severe exposure problem. Because this might discourage participation, it will probably lead to less competitive bidding in real applications.     

Patterns and Determinants of Price Changes: Analysing Individual Consumer Prices in Austria

Abstract. We provide empirical evidence on the degree and characteristics of price stickiness in Austria by estimating the average frequency of price changes and the duration of price spells from a large dataset of individual price records collected for the computation of the Austrian consumer price index. The mean (median) duration of price spells in Austria amounts to 14 (11) months, but there is considerable heterogeneity across sectors and products. We find that price increases occur only slightly more often than price decreases. For both directions, the average magnitude of price changes is quite large (11% and 14%, respectively). The introduction of the euro cash in January 2002 led to more frequent but, on average, smaller price adjustments than usual. Estimating the probability of a price change in a panel probit model, we find a small but positive effect of the price spell duration on the incidence of price changes. Furthermore, product‐specific inflation, the size and the sign of the last price change and the period of the euro introduction significantly affect the probability of a price change.     

Riding High: Success in Sports and the Rise of Doping Cultures

In this paper, I develop a socioeconomic model that can be used to investigate the decisions made by professional athletes concerning doping. In their evaluation of whether to use performance‐enhancing drugs, athletes consider not only costs and benefits (through rank improvement) but also the approval from fellow athletes toward pro‐doping decisions. Peer‐group approval is modeled as a lagged endogenous variable, depending on the share of doping athletes in the history of a sport. As such, the model can explain an equilibrium of high incidence of doping as a “doping culture”. In addition to presenting comparative statics of the equilibrium (i.e., in order to answer the question of how a doping culture can be eliminated), I also investigate how doping decisions are affected by the standards set by the leader in a sport (e.g., Olympic qualification marks), and by the disproportionate public veneration of winners.