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Competition Within A Cartel: League Conduct And Team Conduct In The Market For Baseball Player Services

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Author Info

  • Donald G. Ferguson
  • J. C. H. Jones
  • Kenneth G. Stewart

Abstract

A model of major league baseball is developed which distinguishes between league behavior and individual team behavior.The league is viewed as setting rules that restrict the team's willingness to pay and/or impose costs on the transfer of players between teams. Given these rules, teams then compete for player services. The model is estimated and tested. The evidence suggests that the restrictive effect of league rules on player salaries declined between 1986-1988 and 1989-1991, consistent with anecdotal evidence. Within the rules established by the league, however, teams appear to behave as competitive price-takers through the entire sample period. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 82 (2000)
Issue (Month): 3 (August)
Pages: 422-430

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Handle: RePEc:tpr:restat:v:82:y:2000:i:3:p:422-430

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Cited by:
  1. PEETERS, Thomas, 2011. "Optimal gate revenue sharing in sports leagues," Working Papers 2011015, University of Antwerp, Faculty of Applied Economics.
  2. Peeters, Thomas, 2012. "Media revenue sharing as a coordination device in sports leagues," International Journal of Industrial Organization, Elsevier, vol. 30(2), pages 153-163.
  3. Kenneth G. Stewart, 2007. "Nonjointness and Scope Economies in the Multiproduct Symmetric Generalized McFadden Cost Function," Econometrics Working Papers 0709, Department of Economics, University of Victoria.
  4. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
  5. Kenneth G. Stewart & J. C. H. Jones, 2005. "Are Sports Teams Multi-Product Firms?," Econometrics Working Papers 0513, Department of Economics, University of Victoria.

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