An option-pricing framework for valuation of football players

Tunaru, Radu; Clark, Ephraim and Viney, Howard (2005). An option-pricing framework for valuation of football players. Review of Financial Economics, 14(3-4) pp. 281–295.

DOI: https://doi.org/10.1016/j.rfe.2004.11.002

Abstract

In this paper we develop a contingent claims framework for determining the financial value of professional football players. Contingent claims style modelling is used to develop two models. The pricing of football players is based on a performance index such as the Carling Opta Index. Unexpected events such as injuries are included into the models as Poisson jump processes. The value of a player varies from club to club, depending on club turnover and the total number of performance points generated by the entire team.

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