Nonteam sports and incentives

Abstract

There are important differences between team sports and nonteam sports. In team sports the team owner assembles a team of players with complementary skills by offering long-term contracts. Also, a league promotes league-wide profit maximization. In individual sports the promoter of an individual event needs to attract individual athletes through prize and/or appearance money. Competition may involve seeding to improve the likelihood of the best players remaining in the competition. The prize money may be spread widely to ensure that a good field is attracted or the promoter may use appearance money to ensure the presence of star players.In product markets for individual sports, such as golf, some interesting economic questions are why membership fees predominate over per-use fees and what determines the structure of auction sales of race horses.