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Free Agency and the Concentration of Player Talent in Major League Baseball

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  • Craig A. Depken II

    (University of Texas at Arlington)

Abstract

This article investigates whether the removal of the reserve clause in professional baseball affected the concentration of player talent in the industry. After free agency, a few wealthy teams could purchase the best players over time, leading to a high concentration of productive players and adversely affecting the competitive nature of the industry. To investigate his possibility, the Herfindahl-Hirschman Index, and the deviation of the index from its ideal, for home runs, strike outs and runs scored is related to structural changes in professional baseball. Free agency reduced the concentration of home runs but not of strike outs or runs scored. These findings are consistent with increased player mobility but not with monopolization by a minority of teams.

Suggested Citation

  • Craig A. Depken II, 2002. "Free Agency and the Concentration of Player Talent in Major League Baseball," Journal of Sports Economics, , vol. 3(4), pages 335-353, November.
  • Handle: RePEc:sae:jospec:v:3:y:2002:i:4:p:335-353
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    Cited by:

    1. Jennifer K. Ashcraft & Craig A. Depken, II, 2007. "The Introduction of the Reserve Clause in Major League Baseball: Evidence of its Impact on Select Player Salaries During the 1880s," Working Papers 0710, International Association of Sports Economists;North American Association of Sports Economists.
    2. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    3. Camilla Mastromarco & Marco Runkel, 2009. "Rule changes and competitive balance in Formula One motor racing," Applied Economics, Taylor & Francis Journals, vol. 41(23), pages 3003-3014.
    4. P. Owen & Michael Ryan & Clayton Weatherston, 2007. "Measuring Competitive Balance in Professional Team Sports Using the Herfindahl-Hirschman Index," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(4), pages 289-302, December.
    5. Thomas J. Miceli, 2003. "A Principal-Agent Model of Contracting in Major League Baseball," Working papers 2003-01, University of Connecticut, Department of Economics.

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