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Hidden monopsony rents in winner-take-all markets-sport and economic contribution of Spanish soccer players

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Author Info

  • Pedro Garcia-del-Barrio

    (Department of Economics, University of Navarra, Edificio Bibliotecas (entrada Este), Pamplona, Spain)

  • Francesc Pujol

    (Department of Economics, University of Navarra, Edificio Bibliotecas (entrada Este), Pamplona, Spain)

Abstract

In labor markets where few companies compete for many workers, economic theory predicts monopsony rents. Surprisingly, soccer clubs do not profit from the expected rents. The purpose of this study is to explain such contradictory evidence. Our model and empirical test, using data obtained from the Spanish professional soccer league for the season 2001|2002, suggests that monopsony rents that the clubs were to obtain from most of the soccer players would eventually revert to the superstars. The study also illustrates that the market value of players stems both from their sporting performance and their economic contribution. Copyright © 2007 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/mde.1313
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 28 (2007)
Issue (Month): 1 ()
Pages: 57-70

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Handle: RePEc:wly:mgtdec:v:28:y:2007:i:1:p:57-70

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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  1. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, American Economic Association, vol. 71(5), pages 845-58, December.
  2. Szymanski, Stefan, 2001. "Income Inequality, Competitive Balance and the Attractiveness of Team Sports: Some Evidence and a Natural Experiment from English Soccer," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(469), pages F69-84, February.
  3. Gerald W. Scully, 2004. "Player salary share and the distribution of player earnings," Managerial and Decision Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 25(2), pages 77-86.
  4. Ira Horowitz & Christopher Zappe, 1998. "Thanks for the memories: baseball veterans' end-of-career salaries," Managerial and Decision Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 19(6), pages 377-382.
  5. Sherwin Rosen & Allen Sanderson, 2000. "Labor Markets in Professional Sports," NBER Working Papers 7573, National Bureau of Economic Research, Inc.
  6. Scully, Gerald W., 1995. "The Market Structure of Sports," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226743950, June.
  7. Dobson,Stephen & Goddard,John, 2011. "The Economics of Football," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521517140.
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Cited by:
  1. Julianne Treme & Samuel K. Allen, 2009. "Widely Received: Payoffs to Player Attributes in the NFL," Economics Bulletin, AccessEcon, vol. 29(3), pages 1631-1643.
  2. Alex Bryson & Bernd Frick & Rob Simmons, 2009. "The returns to scarce talent: footedness and player remuneration in European soccer," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 27784, London School of Economics and Political Science, LSE Library.
  3. Pedro Garcia-del-Barrio & Stefan Szymanski, 2009. "Goal! Profit Maximization Versus Win Maximization in Soccer," Review of Industrial Organization, Springer, Springer, vol. 34(1), pages 45-68, February.
  4. Erik E. Lehmann & Günther G. Schulze, 2007. "What does it take to be a star? The role of performance and the media for German soccer players," Discussion Paper Series, Department of International Economic Policy, University of Freiburg 1, Department of International Economic Policy, University of Freiburg, revised Mar 2008.
  5. Daniel Hogele & Sascha L. Schmidt & Benno Torgler, 2012. "The Influence of Superstars on Organizational Identification of External Stakeholders: Empirical Findings from Professional Soccer," School of Economics and Finance Discussion Papers and Working Papers Series, School of Economics and Finance, Queensland University of Technology 294, School of Economics and Finance, Queensland University of Technology.
  6. Rob Simmons & David Berri, 2009. "Gains from Specialization and Free Agency: The Story from the Gridiron," Review of Industrial Organization, Springer, Springer, vol. 34(1), pages 81-98, February.
  7. Kiefer, Stephanie & Scharfenkamp, Katrin, 2012. "The impact of physical attractiveness on the popularity of female tennis players in online media," Discussion Papers of the Institute for Organisational Economics 6/2012, University of Münster, Institute for Organisational Economics.

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