THE DYNAMICS UNDERLYING PERFORMANCE SIGNALING: INSIGHTS FROM THE PROFESSIONAL SPORTS MARKET

摘要

Over the past decades, professional sports have become an important and top-selling industry. The $414 billion professional sports market accounts for 2.8 percent of the GDP of the United States and is growing rapidly at 3.8 percent per year (Price Waterhouse Coopers 2010). Characterized by information asymmetry between the producer (i.e., sports clubs) and consumers (i.e., fans, spectators), the entertainment services the sports market provides in the form of matches are a typical example of an experience good (Sainam, Balasubramanian, and Bayus 2010). Sports are live events and the "people factor" is of major importance. As compared to other experience goods such as motion pictures (Basuroy, Desai, and Talukdar 2006), technological mediation is virtually infeasible. Owing to its high degree of intangibility, the performance of sports clubs that consumers evaluate in terms of enjoyment value cannot be standardized, is difficult to foresee, and is characterized by high variation. Hence, consumers interpret multiple signals that improve their assessment of future performance and determine their purchase behavior (Funk et al. 2009).