Using Monte Carlo Methods for the Valuation of Intangible Assets in Sports Economics

Abstract

This paper indicates the possibilities of using Monte Carlo simulations methods in players’ performance rights value monitoring. The authors have formulated a hypothesis that connects Monte Carlo methods (MC) and econometric models of the player’s life cycle that could give club managers another source of information for the decision process. The MC method in finance is usually used to value the option price on the basis of assumed distribution of price changes. In this approach, the method was used to determine future the hypothetical value of footballers’ performance rights. Using econometric models of the player’s life cycle we could observe and analyse the phase in the life cycle of a football player and determine volatility.

Keywords

• valuation
• players’ performance rights
• econometric models
• monte carlo methods
• g02
• g12
• l83