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Player Salaries, Player Mobility and the Invariance Principle: Evidence from the National Hockey League

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  • Philippe Cyrenne

Abstract

This paper develops a bargaining model of wages and contract length as applied to a professional sports league. Using data based on the recent Collective Bargaining Agreement between players and owners in the National Hockey League, I examine the effect of restrictions on player contracting on both the mobility and salaries of players over the period 2005-2010. Using a variety of estimators both for player mobility and salary determination, I find some evidence that a player’s free agency status effects both mobility and player salaries, but significantly less than might be expected. A key result is that mobility needs to be taken into account when developing models of wage determination in professional sports.

Suggested Citation

  • Philippe Cyrenne, 2013. "Player Salaries, Player Mobility and the Invariance Principle: Evidence from the National Hockey League," Departmental Working Papers 2013-04, The University of Winnipeg, Department of Economics.
    • Handle: RePEc:win:winwop:2013-04
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    File URL: http://economics.uwinnipeg.ca/RePEc/winwop/2013-04.pdf
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    References listed on IDEAS

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    Cited by:

    1. Philippe Cyrenne, 2014. "Salary Inequality, Team Success and the Superstar Effect," Departmental Working Papers 2014-02, The University of Winnipeg, Department of Economics.

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    More about this item

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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