Bonus, Effort, Costs, Market Size And Teams' Performance

Date Added: Aug 2009
Format: PDF

This paper examines the effects of a win bonus, effort, costs and team size, on the demand for talented players, the win percentage and the profits of small and big teams. Teams play a Cournot game, under the following objective functions: teams maximize profits, teams maximize win percentage, the small team maximizes profit and the big win percentage, and vice versa. The effects are based on a priori selected parameter values and bounds, as well as from optimal solutions of non-linear programs, by maximizing anyone of the four win percentage formulae, derived from the respective Cournot reaction functions.