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The New NBA Collective Bargaining Agreement, the Median Voter Model, and a Robin Hood Rent Redistribution

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Author Info

  • J. Richard Hill

    (Central Michigan University)

  • Peter A. Groothuis

    (Westminster College)

Abstract

In this article, it is suggested that the new collective bargaining agreement (CBA) in the National Basketball Association (NBA) redistributes rents from the superstars back to the median voters. In particular, it is suggested that portions of the new agreement, such as salary caps, are designed to improve the rather skewed distribution of salaries in the NBA. Evidence from a Lorenz curve analysis of the first 2 years under the new contract suggests that all players with salaries below the median wage gain from the new agreement, and those with salaries closest to the median wage gain the most. The analysis suggests that skewed salary distributions may lead to CBAs that redistribute the rents from the rich (superstars) to the poor (median voters).

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Bibliographic Info

Article provided by in its journal Journal of Sports Economics.

Volume (Year): 2 (2001)
Issue (Month): 2 (May)
Pages: 131-144

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Handle: RePEc:sae:jospec:v:2:y:2001:i:2:p:131-144

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Cited by:
  1. Simmons, Rob & Berri, David J., 2011. "Mixing the princes and the paupers: Pay and performance in the National Basketball Association," Labour Economics, Elsevier, vol. 18(3), pages 381-388, June.
  2. Helmut Dietl & Tobias Duschl & Markus Lang, 2010. "Executive Pay Regulation: What Regulators, Shareholders, and Managers Can Learn from Major Sports Leagues," Working Papers 0038, University of Zurich, Center for Research in Sports Administration (CRSA), revised Oct 2010.
  3. repec:lan:wpaper:3944 is not listed on IDEAS
  4. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
  5. 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.
  6. 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.
  7. Helmut Dietl & Tobias Duschl & Markus Lang, 2010. "Gehaltsobergrenzen und Luxussteuern: Erkenntnisse aus dem professionellen Mannschaftssport," Working Papers 0039, University of Zurich, Center for Research in Sports Administration (CRSA).
  8. Erick Eschker & Stephen Perez & Mark Siegler, 2004. "The NBA and the influx of international basketball players," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1009-1020.
  9. R Simmons & D J Berri, 2010. "Mixing the princes and the paupers: Pay and performance in the National Basketball Association," Working Papers 611523, Lancaster University Management School, Economics Department.
  10. repec:lan:wpaper:3551 is not listed on IDEAS
  11. repec:lan:wpaper:3659 is not listed on IDEAS

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