Incentives and revenue sharing in college football: Spreading the wealth or giving away the game?

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Abstract
The incentive mechanism literature is mostly theoretical since data limitations typically prohibit the testing of predictions. This paper offers an empirical study of the relationship between incentives and economic performance as applied to conference revenue sharing in college football. Revenue sharing acts as a disincentive to build a stronger team since the pecuniary rewards of team success are diminished if a team must share these rewards with conference opponents. This proposition is tested using data on team performance and revenue sharing rules in Division I‐A college football. The results confirm the main theoretical proposition – conferences which share more, tend to be weaker.