Bernd Frick

Pay inequalities and team performance

Wage disparities and their consequences have long been a topic of economic research. While most papers focus on describing the development of wage differentials over time and seek to identify the reasons for the observed patterns, few attempts have been made to analyze the influence of pay inequality on economic outcomes. A unique and rather large data set from the North American team sports industry is used to address the question how wage disparities affect the performance of professional teams. First, changes in intra‐ and inter‐team wage inequality are documented. Second, the impact of wage inequality on team performance is directly analyzed. Overall, the results differ to a considerable degree between the four major leagues, suggesting that the relative importance of high‐powered incentives and cooperation is different in football and hockey from basketball and baseball.

Labor Market Institutions and Individual Absenteeism in the European Union: The Relative Importance of Sickness Benefit Systems and Employment Protection Legislation

In this article, we analyze the determinants of individual absenteeism focusing on the strictness of employment protection and the generosity of sickness benefits. The data come from the European Survey on Working Conditions launched in 2000. Due to its coverage (the EU-14), the data enable us to identify the relative importance of the institutional framework for explaining differences in absence behavior across nations. Our results reveal that, first, employment protection does not influence the number of absence days while sickness benefits increase absenteeism. And, second, the impact of the institutional framework is smaller than that of some individual worker characteristics.

The Short Supply of Tall People: Competitive Imbalance and the National Basketball Association

In recent yearsa wealthof literaturehasbeen offeredexamining theeconomics ofprofes-sionalteamsports.Muchofthisworkfollowsintheneoclassicaltradition,employingthestandard assumptions and focusing primarily on the impact of individual decision mak-ing. The purposeofthiswork istoshowthattheblindersimposedby thenarrow focus ofthe neoclassical tradition on the issue of competitive imbalance may alter the conclu-sions that a broader view suggests.Economists from the time of Adam Smith have trumpeted the virtues of competi-tion. From the perspective of individual firms, though, profits are typically increasedwhen competition is eliminated. However, in professional sports, the elimination ofcompetition effectively removes the primary source of revenue. In the words of WalterNeale, “Pure monopoly is a disaster. [Former heavy-weight champion] Joe Louis wouldhave had no one to fight and therefore no income” (1964, 2).The analysis of Neale extends beyond the obvious case of the boxing champion toany professional sport. As noted by Mohamed El-Hodiri and James Quirk (1971, 1306),

Are Athletes Doped? Some Theoretical Arguments and Empirical Evidence

Sports fans all over the world have recently witnessed an increasing number of spectacular doping cases, leading to considerable annoyance in the public. However, our knowledge regarding the prevalence of doping is still quite limited, leading some people to speculate that (nearly) all professional athletes are doped and possibly even have to be doped to be good enough to compete successfully in highly selective tournaments. On the other hand, particularly representatives of the sports associations pretend that since the number of positively tested athletes remains small, there are only a few “black sheep,” while in general, the world of sport is clean and fair. In the recent past, a number of theoretical models have been developed that can be empirically tested, which, in the end, may lead to the formulation of policy recommendations (ranging from higher sanctions to legalizing doping). We review the more important models and present anecdotal as well as some quantitative empirical evidence on the prevalence as well as the determinants of doping. (JEL K42, L83, M52)

The Returns to Scarce Talent Footedness and Player Remuneration in European Soccer

The authors investigate the salary returns to the ability to play association football (soccer) with both feet. The majority of footballers are predominantly right footed. Using two data sets, a cross section of footballers in the five main European leagues and a panel of players in the German Bundesliga, the authors find robust evidence of a substantial salary premium for two-footed ability, even after controlling for available player performance measures. The authors assess how this premium varies across the salary distribution and by player position.

THE HIDDEN COSTS OF HIGH-PERFORMANCE WORK PRACTICES: EVIDENCE FROM A LARGE GERMAN STEEL COMPANY.

The authors use monthly data from 25 production units in a German steel plant over the period 1992 to 2001 to test for impacts of teamwork and performance-related pay on productivity, accidents, and absence rates. They find that teamwork and performance pay provide incentives to workers to increase quantity at the expense of quality and to run the machines for long hours instead of spending time on maintenance. Absenteeism increases when a combination of teamwork and performance pay is applied to production units that previously had neither. Results suggest that teamwork and performance pay can create hidden costs for manufacturers and do not necessarily increase worker productivity.

Board Size, Board Composition, and Firm Performance: Empirical Evidence from Germany

We analyze the effects of supervisory board size and composition on the valuation and performance of all German firms listed in the DAX, MDAX and SDAX over the period 1998-2007 (n=294 companies with 2,382 firm-year-observations). Controlling for a large number of other (potential) determinants of firm performance we estimate the joint as well as the separate influence of board size, union representatives, works council representatives, independent worker representatives, bank representatives and former managing board members on firm performance. Contrary to most available studies we are unable to find a consistent effect of either board size or board composition on firm valuation and performance.

Coaching for survival: the hazards of head coach careers in the German 'Bundesliga'

This article analyses how long head coaches survive in the clubs of the first German football league (‘Bundesliga’), where the dismissal of a presumably weak coach is a generally adopted procedure in case of a poor sporting performance of the team. We use duration models for repeated events to accommodate the correlation within individuals. We find that the head coaches of successful teams and those working during the more recent ‘Bosman Effect’ period are more likely to survive in the Bundesliga. Moreover, the head coaches of clubs with relatively high team wage bills are likely to survive for shorter periods of time.

Gender Differences in Competitive Orientations: Empirical Evidence from Ultramarathon Running

A large body of literature documents the existence of a considerable and persistent gender gap in competitiveness. Using longitudinal data from ultramarathon running covering the period 2005-2009, I first confirm the findings of most previous studies by demonstrating that on average the women’s races are indeed less competitive than the men’s contests. Closer inspection of the data, however, reveals that the gender gap has considerably narrowed over the years. Moreover, for men as well as for women, an increase in the number of contestants is not only associated with a better average performance but also with a lower performance dispersion. These findings are not compatible with the hypothesis that gender differences in competitiveness reflect evolved biological differences and/or psychological predispositions. It is, however, compatible with two other (complementary rather than substitute) hypotheses: Due to changing sociocultural conditions boys and girls are today socialized similarly in many parts of the world and due to the increasing returns to success (i.e., identical prize money levels and distributions) women are nowadays motivated to train as hard as comparably talented men.

Sabotage in Tournaments with Heterogeneous Contestants: Empirical Evidence from the Soccer Pitch

In this paper, we address the problem of sabotage in tournaments with heterogeneous contestants. In a first step, we develop a formal model, which yields the prediction that favorites exert higher productive effort, while underdogs are more tempted to engage in destructive actions (sabotage). This is because favorites have a higher return on productive effort and both types of effort are substitutes. In a second step, we use data from German professional soccer to test this prediction. In line with the model, we find that favorite teams win more tackles in a fair way, while underdog teams commit more fouls.