The effect of an agent’s expertise on National Football League contract structure
There is extensive theoretical research focusing on the ways in which principal–agent interactions vary depending on the agent’s expertise or knowledge. While the empirical research testing the implications of these models involves a broad array of experts ranging from lawyers to physicians to real estate agents, we are not aware of any empirical research that focuses on how the level of an agent’s expertise affects outcomes. This paper contributes to the empirical research on delegation to experts by considering agents representing football players in contract negotiations with National Football League (NFL) teams. Using whether and for how long an agent is certified with the NFL Players’ Association as a proxy for expertise, we find that the monetary terms of the contract do not vary with an agent’s expertise, conditional on the contract structure. However, we do find that an agent’s expertise does affect the contract structure–specifically, contract duration and incentive clauses. These results suggest that while minimal expertise is required to understand the appropriate monetary compensation associated with a given contract structure, expertise is required to fully grasp the tradeoffs when negotiating the contract structure.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dezsö SZALAY, 2003.
"The Economics of Clear Advice and Extreme Options,"
Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP)
03.09, Université de Lausanne, Faculté des HEC, DEEP.
- Dezsoe Szalay, 2004. "The Economics of Clear Advice and Extreme Options," Econometric Society 2004 North American Winter Meetings 233, Econometric Society.
- Leffler, Keith B & Rucker, Randal R, 1991. "Transactions Costs and the Efficient Organization of Production: A Study of Timber-Harvesting Contracts," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1060-87, October.
- Philippe Aghion & Jean Tirole, 1994.
"Normal and Real Authority in Organizations,"
94-13, Massachusetts Institute of Technology (MIT), Department of Economics.
- Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Scholarly Articles 4554125, Harvard University Department of Economics.
- Philippe Aghion & Jean Tirole, 1994. "Formal and Real Authority in Organizations," Working papers 95-8, Massachusetts Institute of Technology (MIT), Department of Economics.
- Aghion, Philippe & Tirole, Jean, 1994. "Formal and Real Authority in Organizations," IDEI Working Papers 37, Institut d'Économie Industrielle (IDEI), Toulouse.
- Steven D. Levitt & Chad Syverson, 2008.
"Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate Transactions,"
The Review of Economics and Statistics,
MIT Press, vol. 90(4), pages 599-611, November.
- Steven D. Levitt & Chad Syverson, 2005. "Market Distortions when Agents are Better Informed: The Value of Information in Real Estate Transactions," NBER Working Papers 11053, National Bureau of Economic Research, Inc.
- Oriana Bandiera, 2007. "Contract Duration and Investment Incentives: Evidence from Land Tenancy Agreements," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 953-986, 09.
- Eric Helland, 2003. "Contingency Fees, Settlement Delay, and Low-Quality Litigation: Empirical Evidence from Two Datasets," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(2), pages 517-542, October.
- Jonathan Gruber & Maria Owings, 1994.
"Physician Financial Incentives and Cesarean Section Delivery,"
NBER Working Papers
4933, National Bureau of Economic Research, Inc.
- Jonathan Gruber & Maria Owings, 1996. "Physician Financial Incentives and Cesarean Section Delivery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 99-123, Spring.
- repec:rje:randje:v:37:y:2006:3:p:503-520 is not listed on IDEAS
- Lewis, Tracy R & Sappington, David E M, 1997. "Information Management in Incentive Problems," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 796-821, August.
- Sobel, Joel, 1993. "Information Control in the Principal-Agent Problem," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 259-69, May.
- Joskow, Paul L, 1987. "Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets," American Economic Review, American Economic Association, vol. 77(1), pages 168-85, March.
- Mike Conlin, 1999. "Empirical Test of a Separating Equilibrium in National Football League Contract Negotiations," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 289-304, Summer.
- Orley Ashenfelter & Gordon B. Dahl, 2012. "Bargaining and the Role of Expert Agents: An Empirical Study of Final-Offer Arbitration," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 116-132, February.
- Toshiaki Iizuka, 2012. "Physician Agency and Adoption of Generic Pharmaceuticals," American Economic Review, American Economic Association, vol. 102(6), pages 2826-58, October.
- Michael Conlin & Patrick M. Emerson, 2003. "Multidimensional Separating Equilibria and Moral Hazard: An Empirical Study of National Football League Contract Negotiations," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 760-765, August.
- Michael A. Leeds & Sandra Kowalewski, 2001. "Winner Take All in the NFL," Journal of Sports Economics, , vol. 2(3), pages 244-256, August.
When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:121:y:2013:i:2:p:275-281. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.