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%T Rule Changes and Competitive Balance in Formula One Motor Racing %A Mastromarco, Camilla %A Runkel, Marco %J Applied Economics %N 23 %P 3003-3014 %V 41 %D 2009 %= 2011-04-01T03:55:00Z %~ http://www.peerproject.eu/ %> https://nbn-resolving.org/urn:nbn:de:0168-ssoar-240949 %X This paper provides an economic explanation of the frequent rule changes in the Formula One (F1) motor racing series. In a two-stage model, the FIA (as the organizer of the F1) first decides whether to change the rules or not, and then the racing teams compete in a contest. It turns out that a rule change reduces the teamsâ ™ performances, but also improves competitive balance between the teams. The rule change is implemented, if the FIAâ ™s revenue gain from the latter effect overcompensates the FIAâ ™s revenue loss from the former effect. We provide empirical evidence from F1 seasons in the period 1950-2005 which supports the main implications of the model. %G en %9 journal article %W GESIS - http://www.gesis.org %~ SSOAR - http://www.ssoar.info