Skip to content
Licensed Unlicensed Requires Authentication Published by De Gruyter Oldenbourg March 16, 2016

A Market’s Reward Scheme, Media Attention, and the Transitory Success of Managerial Change

  • Bernd Süssmuth EMAIL logo and Stefan Wagner

Summary

Against the background of growing media interest in professional soccer, this paper proposes a moral hazard model with costly state verification to explain how rule changes affecting the reward scheme of team performance impact on the success of managerial change. As has been shown recently based on four decades of data from the German soccer premiership by Wagner (2010), the incentive change in professional soccer leagues enacted by the FIFA in 1995/96 rendered the drastic measure of firing a coach a more efficient instrument in the clubs’ striving for success. In contrast to existing approaches, our model by accommodating the role of media interest is able to jointly explain (i) the impact of introducing an asymmetric reward scheme, (ii) of managerial turnover and (iii) of the perceived degree of ambition of a club on the athletic output of the team. It is shown that the rule change induces a higher agency cost, which is temporarily economized by clubs that change their management. This cost reducing effect temporarily enhances the efficiency of generating athletic output for top league clubs.

Online erschienen: 2016-3-16
Erschienen im Druck: 2012-6-1

© 2012 by Lucius & Lucius, Stuttgart

Downloaded on 28.3.2024 from https://www.degruyter.com/document/doi/10.1515/jbnst-2012-0306/html
Scroll to top button