Economics 2182A/B Lecture Notes - Lecture 12: Reserve Clause, Kick Six, Profit Maximization
19 Nov 2018
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Announcements: a document will be uploaded to owl on assignment 2 so you can start thinking about it. Assignment 1: you will gather the data, run the regression, and see whether there is a relationship or not. Competitive balance: the balance of wins so that it is consistent with the profit maximization of all the teams in the league. In all other business industries, less competition is good for the firms (more profit). But in sports, that isn"t true: for example, imagine if the maple leafs won by 5 goals every game for 10 years. There would be no uncertainty, and the games would no longer be interesting: eg. espn is more fun than espn classics where we already know the result. In sports, stronger competition may mean more profit for the teams in the league: eg. iron bowl kick six, alabama and auburn were playing in the football game, with auburn being the underdog.
