On the Release of Players to National Teams

The release of players from a club to the national team often leads to a conflict concerning the duration of the players' stay with the national team. Based on a theoretical bargaining model, we examine whether intervention in this conflict by a governing body is desirable. We show that bargaining between the club and the national team yields a socially inefficient outcome if financial compensation is either prohibited or limited. If, however, the national team is allowed to pay unlimited financial compensation to the club, it is not necessary to intervene in the negotiations because the bargaining outcome will be socially optimal.