A contest model of the impact of player transfers on sustainability in the Championship

Specialeforsvar: Karl Pinholt Nørgaard

Titel: A contest model of the impact of player transfers on sustainability in the Championship

Abstract: In this thesis ,a model of player transfers in the second tier of English football, known as the Championship is constructed with the aim of applying the model to investigate the sustainability of the clubs in the division. Sustainability in
the context of the thesis is to be understood as survivability of clubs. Most clubs in the Championship bleed money every season, in this thesis that fact is justified by the assumption that clubs are still profitable in expectations as
long as they have area son able chance of promotion to the Premier League in
which participation alone is enough to offset present day losses. Then, by assuming clubs act economically rationally maximizing expected future payoffs, an arena for clubs to compete for resources that directly contribute to their expected future pay off sis constructed. The foundation of the model is in auction theory where clubs’ valuation of players is contingent on their beliefs
about the player’s ability, their beliefs about their chances of promotion and in the case of contests with other clubs, the impact of the player signing for a rival. Then, the model and its impacts on sustainability is examined theoretically before Is simulate cases of the model subjecting it to different restrictions with the aim of uncovering to what extend restricting clubs’
behavior on the transfer market impacts the sustainability of clubs in the Championship. 

Vejleder: Johan Lagerlöf, Ø.I.
Censor:   Kristian Miltersen, CBS