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Mixing the princes and the paupers: Pay and performance in the National Basketball Association

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  • R Simmons
  • D J Berri
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    Abstract

    We investigate how team and individual performances of players in the National Basketball Association respond to variations in intra-team pay inequality. By breaking down team dispersion into conditional and expected components, we find that expected pay dispersion has a positive effect on team and individual performance. We find that team and individual performances are essentially orthogonal to conditional pay inequality, counter to the hypotheses of fairness and cohesion proposed in the literature both for sports and general occupations. A change in collective bargaining regime in 1996 had little impact on either team or player productivity.

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    File URL: http://www.research.lancs.ac.uk/portal/services/downloadRegister/611524/Document.pdf
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    Bibliographic Info

    Paper provided by Lancaster University Management School, Economics Department in its series Working Papers with number 611523.

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    Date of creation: 2010
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    Handle: RePEc:lan:wpaper:611523

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    1. Eric D. Gould & Eyal Winter, 2009. "Interactions between Workers and the Technology of Production: Evidence from Professional Baseball," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 188-200, February.
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    3. Hajime Katayama & Hudan Nuch, 2011. "A game-level analysis of salary dispersion and team performance in the national basketball association," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 43(10), pages 1193-1207.
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    7. David J. Berri & Michael A. Leeds & Eva Marikova Leeds & Michael Mondello, 2009. "The Role of Managers in Team Performance," International Journal of Sport Finance, Fitness Information Technology, Fitness Information Technology, vol. 4(2), pages 75-93, May.
    8. David Berri & R. Jewell, 2004. "Wage inequality and firm performance: Professional basketball's natural experiment," Atlantic Economic Journal, International Atlantic Economic Society, International Atlantic Economic Society, vol. 32(2), pages 130-139, June.
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    13. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
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    22. repec:att:wimass:9127 is not listed on IDEAS
    23. Paul Sommers, 1998. "Work incentives and salary distributions in the national hockey league," Atlantic Economic Journal, International Atlantic Economic Society, International Atlantic Economic Society, vol. 26(1), pages 119-119, March.
    24. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(3), pages 561-80, June.
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