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Hidden monopsony rents in winner-take-all markets-sport and economic contribution of Spanish soccer players

  • Pedro Garcia-del-Barrio

    (Department of Economics, University of Navarra, Edificio Bibliotecas (entrada Este), Pamplona, Spain)

  • Francesc Pujol

    (Department of Economics, University of Navarra, Edificio Bibliotecas (entrada Este), Pamplona, Spain)

In labor markets where few companies compete for many workers, economic theory predicts monopsony rents. Surprisingly, soccer clubs do not profit from the expected rents. The purpose of this study is to explain such contradictory evidence. Our model and empirical test, using data obtained from the Spanish professional soccer league for the season 2001|2002, suggests that monopsony rents that the clubs were to obtain from most of the soccer players would eventually revert to the superstars. The study also illustrates that the market value of players stems both from their sporting performance and their economic contribution. Copyright © 2007 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/mde.1313
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Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 28 (2007)
Issue (Month): 1 ()
Pages: 57-70

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Handle: RePEc:wly:mgtdec:v:28:y:2007:i:1:p:57-70
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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  1. Gerald W. Scully, 2004. "Player salary share and the distribution of player earnings," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 77-86.
  2. Scully, Gerald W., 1995. "The Market Structure of Sports," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226743950.
  3. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
  4. repec:cup:cbooks:9780521517140 is not listed on IDEAS
  5. Szymanski, Stefan, 2001. "Income Inequality, Competitive Balance and the Attractiveness of Team Sports: Some Evidence and a Natural Experiment from English Soccer," Economic Journal, Royal Economic Society, vol. 111(469), pages F69-84, February.
  6. Sherwin Rosen & Allen Sanderson, 2000. "Labor Markets in Professional Sports," NBER Working Papers 7573, National Bureau of Economic Research, Inc.
  7. Ira Horowitz & Christopher Zappe, 1998. "Thanks for the memories: baseball veterans' end-of-career salaries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 377-382.
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