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Competition Within A Cartel: League Conduct And Team Conduct In The Market For Baseball Player Services

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  • Donald G. Ferguson
  • J. C. H. Jones
  • Kenneth G. Stewart

Abstract

A model of major league baseball is developed which distinguishes between league behavior and individual team behavior.The league is viewed as setting rules that restrict the team's willingness to pay and/or impose costs on the transfer of players between teams. Given these rules, teams then compete for player services. The model is estimated and tested. The evidence suggests that the restrictive effect of league rules on player salaries declined between 1986-1988 and 1989-1991, consistent with anecdotal evidence. Within the rules established by the league, however, teams appear to behave as competitive price-takers through the entire sample period. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Donald G. Ferguson & J. C. H. Jones & Kenneth G. Stewart, 2000. "Competition Within A Cartel: League Conduct And Team Conduct In The Market For Baseball Player Services," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 422-430, August.
  • Handle: RePEc:tpr:restat:v:82:y:2000:i:3:p:422-430
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    Citations

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    Cited by:

    1. Peeters, Thomas, 2012. "Media revenue sharing as a coordination device in sports leagues," International Journal of Industrial Organization, Elsevier, vol. 30(2), pages 153-163.
    2. Kenneth Stewart, 2009. "Non-jointness and scope economies in the multiproduct symmetric generalized McFadden cost function," Journal of Productivity Analysis, Springer, vol. 32(3), pages 161-171, December.
    3. Kenneth Stewart & J. Jones, 2010. "Are sports teams multiproduct firms?," Empirical Economics, Springer, vol. 39(2), pages 487-514, October.
    4. PEETERS, Thomas, 2011. "Optimal gate revenue sharing in sports leagues," Working Papers 2011015, University of Antwerp, Faculty of Applied Economics.
    5. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    6. Budzinski, Oliver & Feddersen, Arne, 2015. "Grundlagen der Sportnachfrage: Theorie und Empirie der Einflussfaktoren auf die Zuschauernachfrage," Ilmenau Economics Discussion Papers 94, Ilmenau University of Technology, Institute of Economics.
    7. Jaume García & Plácido Rodríguez, 2013. "The determinants of football match attendance in Spanish football: an empirical analysis," Chapters,in: The Econometrics of Sport, chapter 9, pages 154-166 Edward Elgar Publishing.

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