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Title:Legal Restrictions on Buyout Fees : Theory and Evidence from German Soccer PDF Logo
Authors:Muehlheusser, Gerd
Frick, Bernd
Feess, Eberhard
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1180
Abstract: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").
Subjects:Labor contracts
Bosman judgement
empirical contract theory
JEL:J41
L83
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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