Choosing "Flawed" aggregation rules: The benefit of social choice violations in a league that values competitive balance

Revealed demand for competitive balance in sports leagues is well-established across many settings. The present study considers the role of aggregation rules (e.g., those that use aggregate individual performances to establish a set of team scores) in sports and other competitive environments. We find that competitive balance and uncertainty of outcome are minimized for aggregation rules that preserve the social choice principles of transitivity and independence. A league that values competitive balance should therefore prefer aggregation rules that violate these social choice principles. Such a preference for ambiguity may not be costless, however, as it may entail important distributional implications for teams, managers, and coaches. (C) 2015 Elsevier B.V. All rights reserved.