Legal Restrictions on Buyout Fees: Theory and Evidence from German Soccer

Feess, Eberhard; Frick, Bernd; Muehlheusser, Gerd (June 2004). Legal Restrictions on Buyout Fees: Theory and Evidence from German Soccer (Discussion Papers 04-11). Bern: Department of Economics

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We perform a theoretical and empirical analysis of the impact of transfer fee regulations
on professional soccer in Europe. Based on a model on the interaction of moral hazard
and heterogeneity, we show (i) how the regulations effect contract durations and wages,
(ii) that contracting parties have an incentive to agree upon inefficiently long contracts,
(iii) how these incentives vary with the legal system, and (iv) how the relationship between contract duration and performance also depends on the legal system. With one exception, all theoretical results are empirically confirmed using a comprehensive data set from the top German Soccer League ("Bundesliga").

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Muehlheusser, Gerd

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

14 Sep 2020 15:48

Last Modified:

14 Sep 2020 15:48

BORIS DOI:

10.7892/boris.145644

URI:

https://boris.unibe.ch/id/eprint/145644

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