IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-00875499.html

Wage dispersion and team performance: a theoretical model and evidence from baseball

Author

Listed:
  • Robert Breunig

    (RSSS - Research School of Social Sciences - ANU - Australian National University)

  • Bronwyn Garrett-Rumba

    (RSSS - Research School of Social Sciences - ANU - Australian National University)

  • Mathieu Jardin

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Yvon Rocaboy

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

We develop a general theoretical model of the effect of wage dispersion on team performance which nests two possibilities: wage inequality may have either negative or positive effects on team performance. A parameter which captures the marginal cost of effort, which we estimate using game-level data from Major League Baseball, determines whether wage dispersion and team performance are negatively or positively related. We find low marginal cost of effort; consequently, wage disparity is negatively related to team performance. Game and season-level regressions also indicate a negative relationship between inequality and performance. We discuss a variety of interpretations of our results.

Suggested Citation

  • Robert Breunig & Bronwyn Garrett-Rumba & Mathieu Jardin & Yvon Rocaboy, 2014. "Wage dispersion and team performance: a theoretical model and evidence from baseball," Post-Print halshs-00875499, HAL.
    • Handle: RePEc:hal:journl:halshs-00875499
    DOI: 10.1080/00036846.2013.839864
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tao, Yu-Li & Chuang, Hwei-Lin & Lin, Eric S., 2016. "Compensation and performance in Major League Baseball: Evidence from salary dispersion and team performance," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 151-159.
    2. Thomas M. Fullerton & James T. Peach, 2016. "Major League Baseball 2015, What a Difference a Year Makes," Applied Economics Letters, Taylor & Francis Journals, vol. 23(18), pages 1289-1293, December.
    3. Yvon Rocaboy & Marek Pavlik, 2020. "Performance Expectations of Professional Sport Teams and In-Season Head Coach Dismissals—Evidence from the English and French Men’s Football First Divisions," Economies, MDPI, vol. 8(4), pages 1-20, October.
    4. Caruso, Raul & Carlo, Bellavite Pellegrini & Marco, Di Domizio, 2016. "Does diversity in the payroll affect soccer teams’ performance? Evidence from the Italian Serie A," MPRA Paper 75644, University Library of Munich, Germany.
    5. Chris Jeffords & Todd Potts, 2019. "NFL Salary Cap Allocation: Matching Theory with Observed Behavior," Economics Bulletin, AccessEcon, vol. 39(1), pages 270-279.
    6. Craig A. Depken & Jeff Lureman, 2018. "Wage Disparity, Team Performance, And The 2005 Nhl Collective Bargaining Agreement," Contemporary Economic Policy, Western Economic Association International, vol. 36(1), pages 192-199, January.
    7. Carlo Bellavite Pellegrini & Raul Caruso & Marco Di Domizio, 2021. "Relative wages, payroll structure and performance in soccer. Evidence from Italian Serie A (2007-2019)," DISCE - Working Papers del Dipartimento di Politica Economica dipe0015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    8. Anna Bykova & Dennis Coates, 2020. "Does Experience Matter? Salary Dispersion, Coaching, And Team Performance," Contemporary Economic Policy, Western Economic Association International, vol. 38(1), pages 188-205, January.
    9. Fullerton, Steven L. & Fullerton, Thomas M., Jr. & Walke, Adam G., 2014. "An Econometric Analysis of the 2013 Major League Baseball Season," MPRA Paper 59593, University Library of Munich, Germany, revised 11 Mar 2014.
    10. Anna Bykova & Dennis Coates, 2022. "Professional team sporting success: do economic and personal freedom provide competitive advantages?," Economics of Governance, Springer, vol. 23(3), pages 323-358, December.
    11. Marco Di Domizio & Carlo Bellavite Pellegrini & Raul Caruso, 2022. "Payroll dispersion and performance in soccer: A seasonal perspective analysis for Italian Serie A (2007–2021)," Contemporary Economic Policy, Western Economic Association International, vol. 40(3), pages 513-525, July.
    12. Papahristodoulou, Christos, 2012. "A NLIP Model on Wage Dispersion and Team Performance," MPRA Paper 39149, University Library of Munich, Germany.
    13. Thadeu Gasparetto & Angel Barajas, 2022. "Wage Dispersion and Team Performance: The Moderation Role of Club Size," Journal of Sports Economics, , vol. 23(5), pages 548-566, June.
    14. Frank TENKORANG & Bree L. DORITY & Eddery LAM, 2014. "Nba Endgame: Do Salaries Matter?," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 14, pages 51-62, December.
    15. Patrick J. Ferguson & Matthew Pinnuck, 2022. "Superstar Productivity and Pay: Evidence from the Australian Football League," The Economic Record, The Economic Society of Australia, vol. 98(321), pages 166-190, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-00875499. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.