An Analysis of Managers' Resource Allocation Dilemma in a Fixed Capacity Situation

Abstract

Managers of museums, repertory theaters, sports leagues, and symphony orchestras invest resources in order to optimize attendance over a season. They must choose between investing resources evenly across a balanced portfolio of offerings or disproportionately concentrating resources on a few more desirable offerings at the expense of the rest of the portfolio. The better strategy is not always apparent. The authors investigate this research question in non-major league sports leagues using the Gini coefficient, a measure of equality/balance adapted from the field of economics. The spread of team success in a league, based on winning percentages and represented by the Gini coefficient, is used as an indicator of resource investment concentration. The findings indicate that availability, that is, season length, influences whether consumers value more a balanced or unbalanced investment strategy.