The Demand for Student-Athlete Labor and the Supply of Violations in the NCAA
AbstractThe National Collegiate Athletic Association (NCAA) acts as a cartel with monopsony power in the market for student-athletes. This paper models the demand for student-athlete labor using a Mill-Edgeworth-Marshall reciprocal demand model. The reciprocal demand translates into a supply of violations (or cheating) on the NCAA cartel agreement. A theoretical foundation for this simultaneous system is created and an empirical model is estimated using a maximum likelihood estimator on violations data from Division IA basketball, baseball, and football programs from 5 conferences. Results suggest market power is significant in explaining some of the variation in the supply of violations. Since detecting and deterring cheating is costly, information about the supply of violations is useful.
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Bibliographic InfoPaper provided by International Association of Sports Economists & North American Association of Sports Economists in its series Working Papers with number 1115.
Length: 25 pages
Date of creation: Oct 2011
Date of revision:
NCAA; monopsony rent; cartel; reciprocal demand; cheating;
Find related papers by JEL classification:
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
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