Gregory Gay

Overview Written by Brian Soebbing Discussion Competitive Balance AISDR UOH Create a model which determines if fans are sensitive to competitive imbalance and team performance

Competitive Balance The degree of balance among teams Standard Deviation of Winning Percentage (SDWP) Examines the dispersion of win percent within an entire league for a season Limited due to the number of games in a season

AISDR Actual to Idealized Standard Deviation Ratio Created to counter the SDWP limitation AISDR for a league is.500/√G G # of games in a season The closer the ratio is to 1 the better the competitive balance

UOH Uncertainty of Outcome Hypothesis The more even team abilities are, the less certain the game’s outcome Therefore a greater attendance is expected The number of games behind the leader is one of the best measurements of demand Attendance is greater for the home team in close games As a result the probability of a home team winning is positive and significant

The Empirical Model I = teams t = seasons u=explanatory term Ô = a fixed effect parameter for each team

Summary Statistics

Regression Results

Results Model covers only 67% of the variation Variables such as market population, market income, and ticket prices These variables are difficult to accurately calculate AISDR is negative and significant Confirms UOH Fans are sensitive to league-wide performance Games behind a playoff berth variable is negative and significant Fans are sensitive to individual team performance

Conclusion Using results can help MLB policy makers create an optimal match between competitive balance and team performance Maximizes attendance