A NLIP Model on Wage Dispersion and Team Performance

Using a Non-Linear Integer Programming (NLIP) model, I examine if wage differences between Super talents and Normal players improve the performance of four teams which participate in a tournament, such as in the UEFA Champions League (UCL) group matches. With ad-hoc wage differences, the optimal solutions of the model show that higher wage equality seems to improve the performance of all teams, irrespectively if the elasticity of substitution between Super- and Normal- players is high or low. In addition to that, a U-type performance exists in two teams with the highest and the second high elasticity of substitution. With team data from the 2011-12 UCL group matches and from the Italian Serie A over 2010-12 seasons, the wage dispersion has no effect on team performances.