A Test of the Optimal Positive Production Network Externality in Major League Baseball
Unlike most businesses, firms in a sports league need viable competitors. While a certain amount of domination is optimal, from an individual owners perspective, too much will result in league dissolution, and thus a lower utility for every owner. Hence, there is a limited positive production network externality. This paper examines the optimal level of the externality in professional baseball using data from each game of the 1996 MLB season. Both absolute and relative quality are important determinants of the demand for sports contests. In fact, fans prefer a game in which two high quality teams are competing, but the home team has approximately twice as good of a chance as the visiting team of winning.
|Date of creation:||1999|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Walter C. Neale, 1964. "The Peculiar Economics of Professional Sports," The Quarterly Journal of Economics, Oxford University Press, vol. 78(1), pages 1-14.
- Daniel Rascher, 1997. "A model of a professional sports league," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(3), pages 327-328, August.
- Glenn Knowles & Keith Sherony & Mike Haupert, 1992. "The Demand for Major League Baseball: A Test of the Uncertainty of Outcome Hypothesis," The American Economist, Omicron Delta Epsilon, vol. 36(2), pages 72-80, October.
- Peel, David A & Thomas, Dennis A, 1988. "Outcome Uncertainty and the Demand for Football: An Analysis of Match Attendances in the English Football League," Scottish Journal of Political Economy, Scottish Economic Society, vol. 35(3), pages 242-49, August.
- Bruce R. Domazlicky & Peter M. Kerr, 1990. "Baseball Attendance and the Designated Hitter," The American Economist, Omicron Delta Epsilon, vol. 34(1), pages 62-68, March.
- Peter J. Sloane, 2000. "The Regulation of Professional Team Sports," IASE Conference Papers 0003, International Association of Sports Economists.
- repec:kap:iaecre:v:3:y:1997:i:3:p:327-328 is not listed on IDEAS
- Jennett, Nicholas I, 1984. "Attendances, Uncertainty of Outcome and Policy in Scottish League Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 31(2), pages 176-98, June.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:25832. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.