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The Sports Business as a Labor Market Laboratory

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Author Info
Lawrence M. Kahn

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Abstract

With superior data on compensation and productivity, as well as the occurrence of abrupt, dramatic market structure and player allocation rules changes, sports labor markets offer an excellent setting in which to test economic hypotheses. This paper reviews evidence from sports in four areas: employer monopsony, discrimination, the Coase Theorem, and incentive contracts, supervision and performance. There is considerable evidence of monopsony as well as for the existence of some forms of discrimination against minority athletes. Incentive contracts have strong effects on player performance and behavior, and there is mixed evidence on the predictions of the Coase Theorem.

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Publisher Info
Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 14 (2000)
Issue (Month): 3 (Summer)
Pages: 75-94
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Handle: RePEc:aea:jecper:v:14:y:2000:i:3:p:75-94

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Bodvarsson, Orn B & Brastow, Raymond T, 1998. "Do Employers Pay for Consistent Performance?: Evidence from the NBA," Economic Inquiry, Oxford University Press, vol. 36(1), pages 145-60, January.
  2. Orszag, Jonathan M., 1994. "A new look at incentive effects and golf tournaments," Economics Letters, Elsevier, vol. 46(1), pages 77-88, September. [Downloadable!] (restricted)
  3. Lawrence M. Kahn, 1993. "Managerial quality, team success, and individual player performance in major league baseball," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(3), pages 531-547, April.
  4. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September. [Downloadable!] (restricted)
  5. Ronald G. Ehrenberg & Michael L. Bognanno, 1990. "The incentive effects of tournaments revisited: Evidence from the European PGA tour," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 43(3), pages 74-88, February.
  6. Michael Krashinsky & Harry A. Krashinsky, 1997. "Do English Canadian Hockey Teams Discriminate Against French Canadian Players?," Canadian Public Policy, University of Toronto Press, vol. 23(2), pages 212-216, June. [Downloadable!] (restricted)
  7. William D. Walsh, 1992. "The Entry Problem of Francophones in the National Hockey League: A Systemic Interpretation," Canadian Public Policy, University of Toronto Press, vol. 18(4), pages 443-460, December. [Downloadable!] (restricted)
  8. Burdekin, Richard C K & Idson, Todd L, 1991. "Customer Preferences, Attendance and the Racial Structure of Professional Basketball Teams," Applied Economics, Taylor and Francis Journals, vol. 23(1), pages 179-86, Part B, J.
  9. Lawrence M. Kahn, 1992. "The effects of race on professional football players' compensation," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 45(2), pages 295-310, January.
  10. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-30, December. [Downloadable!] (restricted)
  11. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64, pages 242. [Downloadable!] (restricted)
  12. Kahn, Lawrence M, 1993. "Free Agency, Long-Term Contracts and Compensation in Major League Baseball: Estimates from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 157-64, February. [Downloadable!] (restricted)
  13. Neil Longley, 1995. "Salary Discrimination in the National Hockey League: The Effects of Team Location," Canadian Public Policy, University of Toronto Press, vol. 21(4), pages 413-422, December. [Downloadable!] (restricted)
  14. Ehrenberg, Ronald G & Bognanno, Michael L, 1990. "Do Tournaments Have Incentive Effects?," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1307-24, December. [Downloadable!] (restricted)
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  15. Marc Lavoie & Gilles Grenier & Serge Coulombe, 1992. "Performance Differentials in the National Hockey League: Discrimination Versus Style-of-Play Thesis," Canadian Public Policy, University of Toronto Press, vol. 18(4), pages 461-469, December. [Downloadable!] (restricted)
  16. Hausman, Jerry A & Leonard, Gregory K, 1997. "Superstars in the National Basketball Association: Economic Value and Policy," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 586-624, October. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. David A. Savage & Benno Torgler, 2009. "Nerves of Steel? Stress, Work Performance and Elite Athletes," School of Economics and Finance Discussion Papers and Working Papers Series 251, School of Economics and Finance, Queensland University of Technology, revised 24 Sep 2009. [Downloadable!]
    Other versions:
  2. Pedro Garcia-del-Barrio & Stefan Szymanski, 2006. "Goal! Profit maximization and win maximization in football leagues," Working Papers 0621, International Association of Sports Economists. [Downloadable!]
  3. Bernd Frick & Robert Simmons, 2008. "The impact of managerial quality on organizational performance: evidence from German soccer," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(7), pages 593-600. [Downloadable!]
  4. Lawrence M. Kahn, 2009. "The Economics of Discrimination: Evidence from Basketball," NCER Working Paper Series 40, National Centre for Econometric Research. [Downloadable!]
    Other versions:
  5. Pedro Garcia-del-Barrio & Stefan Szymanski, 2009. "Goal! Profit Maximization Versus Win Maximization in Soccer," Review of Industrial Organization, Springer, vol. 34(1), pages 45-68, February. [Downloadable!] (restricted)
  6. Bernd Frick & Gunnar Pietzner & Joachim Prinz, 2007. "Career Duration a Competitive Environment: The Labor Market for Soccer Players in Germany," Eastern Economic Journal, Eastern Economic Association, vol. 33(3), pages 429-442, Summer. [Downloadable!]
  7. Goodall, Amanda H. & Kahn, Lawrence M. & Oswald, Andrew J., 2008. "Why Do Leaders Matter? The Role of Expert Knowledge," IZA Discussion Papers 3583, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Bernd Frick & Robert Simmons, 2007. "The Impact of Managerial Quality on Organizational Performance: Evidence from German Soccer," Working Papers 0708, International Association of Sports Economists. [Downloadable!]
  9. repec:bep:eaptop:v:5:y:2005:i:1:p:1396-1396 is not listed on IDEAS
  10. R. Antonietti, 2006. "Human Capital, Sport Performance, and Salary Determination of Professional Athletes," Working Papers 561, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  11. Lawrence M. Kahn, 2006. "The Economics of College Sports: Cartel Behavior vs. Amateurism," IZA Discussion Papers 2186, Institute for the Study of Labor (IZA). [Downloadable!]
  12. Bas ter Weel, 2006. "Does Manager Turnover Improve Firm Performance? New Evidence Using Information from Dutch Soccer, 1986-2004," IZA Discussion Papers 2483, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Jahn K. Hakes & Chad Turner, 2008. "Long-Term Contracts in Major League Baseball," Working Papers 0831, International Association of Sports Economists. [Downloadable!]
  14. Christopher Coyne & Justin Isaacs & Jeremy Schwartz & Anthony Carilli, 2007. "Put me in, Coach, I’m ready to play," The Review of Austrian Economics, Springer, vol. 20(4), pages 237-246, December. [Downloadable!] (restricted)
  15. Peter A. Groothuis & Richard Hill, 2007. "Exit Discrimination in Major League Baseball: 1990-2004," Working Papers 07-02, Department of Economics, Appalachian State University. [Downloadable!]
    Other versions:
  16. Richard C.K. Burdekin & Richard T. Hossfeld & Janet K. Smith, 2002. "Are NBA Fans Becoming Indifferent to Race? Evidence from the 1990s," Claremont Colleges Working Papers 2002-12, Claremont Colleges. [Downloadable!]
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