Giffen Behaviour in Sports

The analysis of Giffen goods in economics has indicated, both theoretically and empirically, that they are a rare occurrence in their purest form. This paper builds a simple theoretical framework to show how standard, non-Giffen goods can display Giffen-like responses when decision makers face multiple binding constraints. We then apply the framework to different sports settings to show how it is possible that bottom-tier teams may increase spending on established players when transfer costs rise, stricter penalties that raise the ‘price’ of performance-enhancing drugs can induce reluctant users to increase usage, and higher injury risk can increase reliance on high-intensity training. These relatively simple examples illustrate some cases where Giffen Behaviour can be present in the world of sports.