Allocation of scarce resources: Insight from the NFL salary cap
AbstractWe examine the effects of variations in player compensation on NFL franchise performance from 1994 to 2004. Evidence shows that team success depends significantly upon both the actual and perceived fairness of pay distribution. Specifically, proficiency relative to that of competitors is high when compensation inequity across players, whether justified or unjustified, is low. This result suggests that franchises taking a superstar-approach to personnel decisions perform worse on average, most likely because of the dissatisfaction generated among relatively low-paid teammates.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economics and Business.
Volume (Year): 60 (2008)
Issue (Month): 6 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/jeconbus
NFL Compensation Performance;
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.:
- Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
- Wallace Hendricks & Lawrence DeBrock & Roger Koenker, 2003. "Uncertainty, Hiring, and Subsequent Performance: The NFL Draft," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 857-886, October.
- Edward P. Lazear, 1991. "Labor Economics and the Psychology of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 89-110, Spring.
- Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
- David Berri & R. Jewell, 2004. "Wage inequality and firm performance: Professional basketball's natural experiment," Atlantic Economic Journal, International Atlantic Economic Society, vol. 32(2), pages 130-139, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.