The transfer market for sports players - A contest theory approach

Abstract

The transfer market for sports players is analyzed using a contest theory approach. A sports team exerts two types of effort in order to attract a player: productive effort, for which the team incurs a cost only if the player signs a contract with them; and persuading effort, for which the team incurs a cost regardless. The findings describe the conditions under which there will be no persuading effort, as well as the impact of persuading effort on productive effort and the contestant's utility.