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Ownership of property-rights and the allocation of talents


  • Haoming Liu
  • Yohanes Riyanto


Under the reserve-clause system that assigns the property-rights on the Major League Baseball players' services to teams, player transfers are negotiated between teams without the involvement of players. In contrast, under the current free-agency system, players with free-agent status negotiate directly with potential suitors. Thus, the system assigns the property-rights to players. Using data extracted from the Baseball Archive (, this article examines the effect of the change in the property-rights assignment on the allocation of talents across teams. We find that the change increased large-market teams' shares of veteran all-star players and the concentration of senior players.

Suggested Citation

  • Haoming Liu & Yohanes Riyanto, 2009. "Ownership of property-rights and the allocation of talents," Applied Economics, Taylor & Francis Journals, vol. 41(26), pages 3425-3436.
  • Handle: RePEc:taf:applec:v:41:y:2009:i:26:p:3425-3436
    DOI: 10.1080/00036840701392869

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