'Who's on first': an empirical test of the Coase Theorem in baseball
Because of their highly developed skills, major league baseball players generate significant economic rents. According to the 'weak version' of the Coase theorem, the allocation of these players is independent of who controls the rights to these rents, which depends on the rules governing competition in the baseball labour market. The rules of Major League Baseball establish a dual system. For senior players the market is competitive, and players have the right of 'free agency,' allowing them to attempt to contract with the team of their choice; for players with fewer years of experience the market is monopsonistic, and a player's right to play baseball is owned by his current team. Consequently, we simultaneously observe two different allocations of property rights. Using individual player data for 1979 and 1980 we test whether baseball player movement is independent of the ownership of these rents. We estimate the wage (marginal revenue) determination process for free-agent and non free agent movers and non-movers. This permits us to generate expected gains from a move for both free-agent eligible and non free-agent eligible players. Coase's theorem is tested by determining if both player types, and, hence, player allocation, are equally responsive to gains from migration.
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.
Volume (Year): 33 (2001)
Issue (Month): 5 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20 |
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:33:y:2001:i:5:p:593-603. 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: (Michael McNulty)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.