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Competition in Major League Baseball: the impact expansion

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  • Martin Schmidt

Abstract

Numerous empirical studies of competition within Major League Baseball (MLB) have highlighted the recent rise in competitive balance. While most explanations for the increased competitiveness have revolved around the establishment of the amateur draft or the introduction of free agency, the present paper maintains that the movement towards increased competition occurred much earlier. In particular, it is an outgrowth of the move to expand beyond the original 16 teams. The results from estimating the time-series behaviour of competitive balance within the two leagues suggests that the movement toward greater competitive balance occurred quickly after the two leagues began expanding. Finally, rather than use the conventional standard deviation measure for competitive balance, the present paper incorporates a more traditional measure of inequity, the Gini coefficient.

Suggested Citation

  • Martin Schmidt, 2001. "Competition in Major League Baseball: the impact expansion," Applied Economics Letters, Taylor & Francis Journals, vol. 8(1), pages 21-26.
  • Handle: RePEc:taf:apeclt:v:8:y:2001:i:1:p:21-26
    DOI: 10.1080/135048501750041231
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    Citations

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    Cited by:

    1. Young Lee & Rodney Fort, 2008. "Attendance and the Uncertainty-of-Outcome Hypothesis in Baseball," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(4), pages 281-295, December.
    2. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    3. Jan Šíma & Jan Procházka, 2011. "Compared Competitive Balance Evolution in the Dutch and the Czech Football Leagues between 1970 and 2010," Ekonomika a Management, University of Economics, Prague, vol. 2011(2).
    4. Eiji Yamamura, 2012. "Effect of Linguistic Heterogeneity on Technology Transfer: An Economic Study of FIFA Football Rankings," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 40(1), pages 85-99, March.
    5. Martin Schmidt & David Berri, 2002. "Competitive Balance and Market Size in Major League Baseball: A Response to Baseball's Blue Ribbon Panel," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 21(1), pages 41-54, August.
    6. Michela Pierini, 2011. "Diritti Tv E Competitive Balance Nel Calcio Professionistico Italiano," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 7(2), pages 87-113, September.
    7. yamamura, eiji, 2006. "Team Payroll, Competitive Balance, and Team Performance in the Japan Professional Baseball League: A Study using 1993-2004 Panel Data," MPRA Paper 10836, University Library of Munich, Germany.
    8. Evan S. Totty & Mark F. Owens, 2011. "Salary Caps and Competitive Balance in Professional Sports Leagues," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 11(2), pages 46-56, Fall.
    9. Rodney Fort & Young Hoon Lee, 2007. "Structural Change, Competitive Balance, And The Rest Of The Major Leagues," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 519-532, July.
    10. Tony Caporale & Trevor Collier, 2015. "Are We Getting Better or Are They Getting Worse? Draft Position, Strength of Schedule, and Competitive Balance in the National Football League," Journal of Labor Research, Springer, vol. 36(3), pages 291-300, September.
    11. Martin Schmidt, 2006. "On the evolution of competition: an application of nonlinear tests," Applied Economics, Taylor & Francis Journals, vol. 38(1), pages 1-12.
    12. Meletakos, Panagiotis & Chatzicharistos, Dimitrios & Apostolidis, Nikolaos & Manasis, Vasilios & Bayios, Ioannis, 2016. "Foreign players and competitive balance in Greek basketball and handball championships," Sport Management Review, Elsevier, vol. 19(4), pages 391-401.

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