IDEAS home Printed from https://ideas.repec.org/a/sae/jospec/v7y2006i2p201-221.html
   My bibliography  Save this article

The Coase Theorem and Player Movement in Major League Baseball

Author

Listed:
  • David G. Surdam

    (University of Northern Iowa)

Abstract

The Coase theorem suggests that under certain conditions, the distribution of player talent should be similar before and after free agency. Previous attempts to test the theory's applicability to major league baseball were either examinations of win-loss distributions or comparisons of player movements before and after free agency. These approaches have significant drawbacks. Did the same teams sport winning records over an extended period before and after free agency? Franchise relocations and implementation of a draft of amateur players should have also affected player movement patterns and distributions of win-loss records. American League teams had changes in their win-loss records that do not fully correspond to the theory's predictions, raising questions of what transaction costs might have impeded transferring players. Teams in smaller towns tended to lose talent to teams in larger cities; the flow of talent was roughly similar between periods.

Suggested Citation

  • David G. Surdam, 2006. "The Coase Theorem and Player Movement in Major League Baseball," Journal of Sports Economics, , vol. 7(2), pages 201-221, May.
    • Handle: RePEc:sae:jospec:v:7:y:2006:i:2:p:201-221
    DOI: 10.1177/1527002504266227
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1527002504266227
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1527002504266227?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Michael R. Butler, 1995. "Competitive Balance in Major League Baseball," The American Economist, Sage Publications, vol. 39(2), pages 46-52, October.
    2. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64(3), pages 242-242.
    3. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    4. Drahozal, Christopher R., 1986. "The impact of free agency on the distribution of playing talent in major league baseball," Journal of Economics and Business, Elsevier, vol. 38(2), pages 113-121, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel R. Marburger, 2009. "Why Do Player Trades Dominate Sales?," Journal of Sports Economics, , vol. 10(4), pages 335-350, August.
    2. Philip L. Hersch & Jodi E. Pelkowski, 2014. "Does General Manager Networking Affect Choice of Trade Partners in Major League Baseball?," Journal of Sports Economics, , vol. 15(6), pages 601-616, December.
    3. Helmut Dietl & Markus Lang & Johannes Orlowski & Philipp Wegelin, 2023. "The Effect of the Initial Distribution of Labor-Related Property Rights on the Allocative Efficiency of Labor Markets," Working Papers 398, University of Zurich, Department of Business Administration (IBW).
    4. Robert D. Tollison & Octavian Vasilescu, 2011. "The Designated Hitter Rule and the Distribution of Pitching Talent Across Leagues," Journal of Sports Economics, , vol. 12(4), pages 448-463, August.
    5. Wladimir Andreff, 2009. "Équilibre compétitif et contrainte budgétaire dans une ligue de sport professionnel," Revue économique, Presses de Sciences-Po, vol. 60(3), pages 591-633.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Schmidt, 2011. "Institutional Change and Factor Movement in Major League Baseball: An Examination of the Coase Theorem’s Invariance Principle," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 39(3), pages 187-205, November.
    2. Anthony C. Krautmann & Young Hoon Lee & Kevin Quinn, 2011. "Playoff Uncertainty and Pennant Races," Journal of Sports Economics, , vol. 12(5), pages 495-514, October.
    3. Philip L. Hersch & Jodi E. Pelkowski, 2014. "Does General Manager Networking Affect Choice of Trade Partners in Major League Baseball?," Journal of Sports Economics, , vol. 15(6), pages 601-616, December.
    4. Daniel R. Marburger, 2002. "Property Rights and Unilateral Player Transfers in a Multiconference Sports League," Journal of Sports Economics, , vol. 3(2), pages 122-132, May.
    5. Peter Fishman, 2003. "Competitive Balance and Free Agency in Major League Baseball," The American Economist, Sage Publications, vol. 47(2), pages 86-91, October.
    6. Young Hoon Lee, 2009. "The Impact of Postseason Restructuring on the Competitive Balance and Fan Demand in Major League Baseball," Journal of Sports Economics, , vol. 10(3), pages 219-235, June.
    7. Geoffrey N Tuck & Athol R Whitten, 2013. "Lead Us Not into Tanktation: A Simulation Modelling Approach to Gain Insights into Incentives for Sporting Teams to Tank," PLOS ONE, Public Library of Science, vol. 8(11), pages 1-10, November.
    8. Fort, Rodney & Maxcy, Joel & Diehl, Mark, 2016. "Uncertainty by regulation: Rottenberg׳s invariance principle," Research in Economics, Elsevier, vol. 70(3), pages 454-467.
    9. Andrew Larsen & Aju J. Fenn & Erin Leanne Spenner, 2006. "The Impact of Free Agency and the Salary Cap on Competitive Balance in the National Football League," Journal of Sports Economics, , vol. 7(4), pages 374-390, November.
    10. Robert J. Lemke & Matthew Leonard & Kelebogile Tlhokwane, 2010. "Estimating Attendance at Major League Baseball Games for the 2007 Season," Journal of Sports Economics, , vol. 11(3), pages 316-348, June.
    11. Rosen, Sherwin & Sanderson, Allen, 2001. "Labour Markets in Professional Sports," Economic Journal, Royal Economic Society, vol. 111(469), pages 47-68, February.
    12. T. Dejonghe & W. Van Opstal, 2009. "The Consequences of an Open Labour Market in Separated Product Markets in European Professional Football," Review of Business and Economic Literature, Intersentia, vol. 54(4), pages 489-512, December.
    13. Daniel R. Marburger, 2003. "Does the Assignment of Property Rights Encourage or Discourage Shirking?," Journal of Sports Economics, , vol. 4(1), pages 19-34, February.
    14. Daniel Sutter & Stephen Winkler, 2003. "Ncaa Scholarship Limits and Competitive Balance in College Football," Journal of Sports Economics, , vol. 4(1), pages 3-18, February.
    15. Allen R. Sanderson & John J. Siegfried, 2003. "Thinking about Competitive Balance," Journal of Sports Economics, , vol. 4(4), pages 255-279, November.
    16. Jan Šíma, 2013. "Static Competitive Balance of Three Chosen Central European Football Leagues," Ekonomika a Management, Prague University of Economics and Business, vol. 2013(4).
    17. Trudo Dejonghe & Wim Van Opstal, 2010. "Competitive balance between national leagues in European football after the Bosman Case," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 6(2), pages 41-61, Settembre.
    18. Brian Mills & Rodney Fort, 2014. "League-Level Attendance And Outcome Uncertainty In U.S. Pro Sports Leagues," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 205-218, January.
    19. Thomas H. Bruggink, 1993. "National Pastime to Dismal Science: Using Baseball to Illustrate Economic Principles," Eastern Economic Journal, Eastern Economic Association, vol. 19(3), pages 275-294, Summer.
    20. Rodney Fort, 2005. "The Golden Anniversary of “The Baseball Players’ Labor Marketâ€," Journal of Sports Economics, , vol. 6(4), pages 347-358, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jospec:v:7:y:2006:i:2:p:201-221. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.