Club/player contracts: Another application of options pricing theory

P. Antonioni and J. Cubbin, "The Bosman Ruling and the emergence of a single market in soccer talent", European Journal of Law and Economics, 9(2): 157-73, 2000.

This paper discusses the effect of the Bosman Ruling on the nature of contracts between club and player under the modeling framework of options pricing theory.  It uses the framework to formulate club strategies in contract negotiations in the post-Bosman landscape.  (It's worth asking if the findings continue to hold in 2011.)

Review after the jump.