The peculiar economics of professional sports-summary
This journal article mainly discuss about the differences in economics terms which used to explain business outcomes or situations in business world compared to professional sports firms.in that the basic proposition it used is called louis-schemelling paradox.in brief it expresses that always a firm will be better off smaller or less important the competition and it will continuously try to reach a situation in which it is the only supplier in the industry. But this is not the case when it comes to professional sports. For an example if considered the heavy-weight champion of the world if they want to earn more money or in economic terms to maximize it profits the first thing he should need to have is a strong contender or in other words a competition. The stronger the contender the larger the profits from fighting with him, because the doubt or the interest about the competition is what arouse the interest of the spectators hence increases the revenue. Therefore a pure monopoly is a disaster as the professional sport is considered. But now the question is there that whether it is possible that there is a business which finds monopoly unprofitable which is contrary to the theories in the business world. This study states that a business monopoly is not profitable in the sporting business as well as in the business of life. One of the peculiarities in the economics of professional sports is that receipts depend upon competition among the players or the teams, not upon business competition among the firms running contenders. Therefore more the sporting competition greater will be the profits. This paradox appears because the firms that are in the real business world is not same as the firms in sporting world. Also it is not the firm of economic analysis therefore the item sold by the sporting firm is not the product of these firms, or not entirely and this would give rise to the phenomenon called inverted...
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