Dietl, Helmut; Franck, Egon; Nüesch, Stephan - Institut für Strategie und Unternehmensökonomik … - 2005
In 2002 the leading European football clubs reacted to the increasing player salaries by signing a voluntary agreement to limit player salaries to 70% of revenues. We analyze under which conditions a voluntary salary cap agreement is self-enforcing. Based on a simple model of a league with two...