XiaoGang Che

The impact of resale on entry in second price auctions

This paper investigates the effect of resale allowance on entry strategies in a second price auction with two bidders whose entries are sequential and costly. We first characterize the perfect Bayesian equilibrium in cutoff strategies. We then show that there exists a unique threshold such that if the reseller’s bargaining power is greater (less) than the threshold, resale allowance causes the leading bidder (the following bidder) to have a higher (lower) incentive on entry; i.e., the cutoff of entry becomes lower (higher). We also discuss asymmetric bidders and the original seller’s expected revenue.

Earnings and performance in women’s skiing

Women’s sports have received much less attention from economists than from other social scientists. This Handbook fills that gap with a comprehensive economic analysis of women’s sports. It also analyzes how the behavior and treatment of female athletes reflect broad economic forces.

Price setting and competition in fixed odds betting markets

In this chapter the authors show how bookmaker commissions, termed ‘over-round’, have fallen over time through greater competition, hence offering improved value for bettors. They take the English Premier League as their test case and focus on the two largest UK bookmakers. The findings are most interesting. First, over-rounds have fallen over time. Second, this reduction is attributable to the emergence of a betting exchange, Betfair, which has become increasingly popular in the UK. Third, perhaps surprisingly, the reduced commissions are not related to the growth of online bookmakers in the UK. Thus, it is increased competition from the betting exchange and not from online bookmakers that has exerted downward pressure on bookmaker over-rounds.

Rival sports league formation and competition

Relatively little past research modeled rival league formation in professional sports markets. Competition in sport takes several forms: competition between individual athletes, competition between teams in leagues, competition between national teams in international contests, competition for incoming and existing players, and so on. One of the least analyzed forms of competition is competition between leagues in the same sport. In this chapter, we develop a model of competition between sports leagues. The only previous paper to examine league formation in sports was Quirk and Fort (1997), who developed a model of the profits earned by incumbent and rival leagues, and the interaction between them; this model featured heterogeneous cities; some cities can support two teams while other cities can support only one. The model by Quirk and Fort (1997) features competition between leagues in the form of a ‘war’ that reduces the profits earned by teams in both leagues due to competition for fans and players. In this model rival league formation is deterred only through the presence of side payments from the incumbent league to owners of teams in a rival league. In this sense, the model cannot explain why no rival league has emerged in any of the professional sports leagues in North America in past decades. Here, we develop a model of competition and strategic interaction between professional sports leagues providing games in the same sport in a single market.1 Our model first focuses on the economic decisions made by an existing incumbent league and then introduces a rival league. The model assumes that a certain number of homogenous cities exist, and that the incumbent league places teams in a subset of these cities. We do not model the formation of incumbent leagues. The question we focus on in the model is based on a common outcome in professional sports leagues: we often observe the outcome of a single dominant monopoly league a specific sport in a market and also observe