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Monitoring Cartel Behavior and Stability: Evidence from NCAA Football

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  • Brad R. Humphreys
  • Jane E. Ruseski

Abstract

We investigate self‐monitoring and enforcement of the NCAA player recruitment agreement in the context of a cartel model with incomplete information and reaction lags. Empirical results from a panel probit model strongly support the predictions of the model. Lagged winning percentage, the discount rate of the decision maker, the institution's commitment to nonathletic activities, and the institution's demand‐cost configuration are all important predictors of institutions being placed on probation for violating the cartel rules.

Suggested Citation

  • Brad R. Humphreys & Jane E. Ruseski, 2009. "Monitoring Cartel Behavior and Stability: Evidence from NCAA Football," Southern Economic Journal, John Wiley & Sons, vol. 75(3), pages 720-735, January.
    • Handle: RePEc:wly:soecon:v:75:y:2009:i:3:p:720-735
    DOI: 10.1002/j.2325-8012.2009.tb00928.x
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    References listed on IDEAS

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    1. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
    2. Craig A. Depken II & Dennis P. Wilson, 2006. "NCAA Enforcement and Competitive Balance in College Football," Southern Economic Journal, John Wiley & Sons, vol. 72(4), pages 826-845, April.
    3. repec:ucp:bkecon:9780226253268 is not listed on IDEAS
    4. Brown, Robert W, 1993. "An Estimate of the Rent Generated by a Premium College Football Player," Economic Inquiry, Western Economic Association International, vol. 31(4), pages 671-684, October.
    5. David Forrest & Rob Simmons & Stefan Szymanski, 2010. "Broadcasting, Attendance and the Inefficiency of Cartels," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 5, pages 112-135, Palgrave Macmillan.
    6. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-764, May.
    7. E. Eckard, 1998. "The NCAA Cartel and Competitive Balance in College Football," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(3), pages 347-369, June.
    8. Michael Spence, 1978. "Tacit Co-ordination and Imperfect Information," Canadian Journal of Economics, Canadian Economics Association, vol. 11(3), pages 490-505, August.
    9. Grossman, Peter Z, 1996. "The Dynamics of a Stable Cartel: The Railroad Express 1851-1913," Economic Inquiry, Western Economic Association International, vol. 34(2), pages 220-236, April.
    10. Brad R. Humphreys, 2000. "Equal Pay on the Hardwood: The Earnings Gap Between Male and Female NCAA Division I Basketball Coaches," Journal of Sports Economics, , vol. 1(3), pages 299-307, August.
    11. Fleisher, Arthur III & Shughart, William II & Tollison, Robert D. & Goff, Brian L., 1988. "Crime or punishment? : Enforcement of the NCAA football cartel," Journal of Economic Behavior & Organization, Elsevier, vol. 10(4), pages 433-451, December.
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    Cited by:

    1. Candon Johnson & Bryan C. McCannon, 2022. "Athletics and Admissions: The Impact of the Penn State Football Scandal on Student Quality," Journal of Sports Economics, , vol. 23(2), pages 200-221, February.
    2. Kathleen Carroll & Brad R. Humphreys, 2016. "Opportunistic Behavior in a Cartel Setting," Journal of Sports Economics, , vol. 17(6), pages 601-628, August.
    3. Rodney Fort, 2022. "College sports governance: “Amateurism” enforcement in big time college sports," Economics of Governance, Springer, vol. 23(3), pages 303-322, December.

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