Financial Incentives and Strategic Behavior in European Professional Football: A Match-day Analysis of Starting Squads in the German Bundesliga and UEFA Competitions

Marc Rohde and Christoph Breuer

Europe’s professional football clubs engage in intraseasonal races to win the league, qualify for Union of European Football Associations (UEFA) competitions, and avoid relegation. In these competitions, playing talent is a scarce good as players invest effort in the form of fitness and the risk of injuries. Thus, managers face incentives to adjust effort levels by means of changing the value of starting squads. This paper analyzes whether managers save efforts in the absence of financial incentives or ahead of more important games. The theoretical model extends previous papers from the contest theory and shirking literature to a match-day panel regression analysis of strategic behavior. We build on two unbalanced panels covering 10 consecutive seasons in the German Bundesliga (n=6,120) and UEFA Champions League (n=1,920). The insights generated in this article are important for national league administrators as well as the UEFA in aligning their competitions towards each other and increasing incentives towards participating teams.