Migrating Football Players, Transfer Fees and Migration Controls



Profits are maximized with respect to the number of additional home-grown talents,
represented by the parameter
μ , and the number of talents hired from abroad, T21. The
first-order conditions for the decision problem read;

⅛ = αY1 ((1 -α(1 + ε)Tπ)logσ -1)0                           (18)

T21

1 = αY1 ((1 -α(1 + ε)T21)logσ -1>5/e1 -c 0                      (19)

∂μ

It is easy to see from these first-order conditions that if an interior solution for the number
of imported talents hold,
T21 0, no additional talents will be raised at home, i.e.
μ = 0. The optimal import of talents can then easily be derived from (18) as:

T21 = (1 - ɪ)-ɪ-                             (20)

logσ α(1 +ε)

Table 6. Home-grown rule, players’ allocation and welfare*)

λ

T1

t21

T2

Whg

Wtr

„ *

W____

α = 0.5; σ = 7

0.86

0.84

0.14

0.23

658.8

674.0

674.7

α = 0.5; σ = 11

0.83

0.83

0.17

0.35

690.2

696.9

698.3

α = 0.5; σ = 15

0.81

0.81

0.19

0.42

712.8

716.9

718.3

α = 0.9; σ = 7

0.65

0.35

0.19

0.29

684.1

685.7

685.7

α = 0.9; σ = 11

0.68

0.44

0.21

0.42

715.8

718.6

718.8

α = 0.9; σ = 15

0.70

0.49

0.21

0.51

742.6

746.1

746.2

*)The value of the parameters used for this calculation

are: N

=100, N2 =50. λis the minimum home-

grown rule for which the small league 2 finds it advantageous to train talents, T1

is the number of players

trained in country 1, T21 ( T2 )

is the number of players trained

in league 2 and playing

in league 1 (2).

Whg, Wtr , W*

are welfare under the

home-grown rule,

the transfer-rate

system

and the social

optimum, respectively

What remains to be considered is how high the required home-grown rate λ has to be in
order to make it advantageous for league 2 to have training facilities of their own. For a
too low value of
λ league 2 will lose ‘too many’ of its talents and not start training
facilities and play with mediocre talented players only. Actually, it turns out with our
sample of parameters that if
α= 0.1 league 1’s demand for foreign talents for any
λ< 1will be such that the small league will have no incentive to start training their

22



More intriguing information

1. The name is absent
2. The name is absent
3. On Dictatorship, Economic Development and Stability
4. Sustainability of economic development and governance patterns in water management - an overview on the reorganisation of public utilities in Campania, Italy, under EU Framework Directive in the field of water policy (2000/60/CE)
5. XML PUBLISHING SOLUTIONS FOR A COMPANY
6. Public infrastructure capital, scale economies and returns to variety
7. Willingness-to-Pay for Energy Conservation and Free-Ridership on Subsidization – Evidence from Germany
8. Fiscal Rules, Fiscal Institutions, and Fiscal Performance
9. The geography of collaborative knowledge production: entropy techniques and results for the European Union
10. EXECUTIVE SUMMARIES