The Invariance Proposition in Baseball: New Evidence
This paper considers the changes in revenue sharing that occurred prior to the 2007 season and its effects on parity via its effects on marginal revenues. Based on the results from an empirical specification for team revenue, we find evidence that the reduction in revenue sharing increased marginal revenue by approximately the same amount for both small and large market clubs despite other differences in how small and large market club revenues are determined. The upshot of this result is that the modest change in revenue sharing had little to no effect on league parity in the three seasons following its implementation. The well-known invariance proposition in the economics of sport literature that predicts this result appears to hold.
|Date of creation:||Sep 2011|
|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.:
- Stephen T. Easton & Duane W. Rockerbie, 2005. "Revenue Sharing, Conjectures, and Scarce Talent in a Sports League Model," Journal of Sports Economics, The North American Association of Sports Economists, vol. 6(4), pages 359-378, November.
- Stefan Szymanski & Stefan KÈsenne, 2004.
"Competitive balance and gate revenue sharing in team sports,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 52(1), pages 165-177, 03.
- SZYMANSKI, Stefan & KÉSENNE, Stefan, 2003. "Competitive balance and gate revenue sharing in team sports," Working Papers 2003003, University of Antwerp, Faculty of Applied Economics.
- Jason Winfree & Jill McCluskey & Ron Mittelhammer & Rodney Fort, 2004. "Location and attendance in major league baseball," Applied Economics, Taylor & Francis Journals, vol. 36(19), pages 2117-2124.
- Rockerbie, Duane, 2007. "Free Agent Auctions and Revenue Sharing: A Simple Approach," MPRA Paper 2218, University Library of Munich, Germany.
- Rodney Fort, 2010. "Observation, Replication, and Measurement in Sports Economics," Journal of Sports Economics, The North American Association of Sports Economists, vol. 11(1), pages 3-16, February.
- Jason Winfree & Rodney Fort, 2012. "Nash Conjectures and Talent Supply in Sports League Modeling," Journal of Sports Economics, The North American Association of Sports Economists, vol. 13(3), pages 306-313, June.
- repec:ebl:ecbull:v:1:y:2003:i:2:p:1-10 is not listed on IDEAS
- KÉSENNE, Stefan, . "Revenue sharing and competitive balance. Does it invariance proposition hold?," Working Papers 2003021, University of Antwerp, Faculty of Applied Economics.
- Frederick Wiseman & Sangit Chatterjee, 2003. "Team payroll and team performance in major league baseball: 1985-2002," Economics Bulletin, AccessEcon, vol. 1(2), pages 1-10.
- E. Woodrow Eckard, 2001. "Baseballâ€™s Blue Ribbon Economic Report," Journal of Sports Economics, The North American Association of Sports Economists, vol. 2(3), pages 213-227, August.
- Joel Maxcy, 2009. "Progressive Revenue Sharing in Major League Baseball: The Effect on Player Transfers and Talent Distribution," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(3), pages 275-297, November.
- Krautmann, Anthony C, 1999. "What's Wrong with Scully-Estimates of a Player's Marginal Revenue Product," Economic Inquiry, Western Economic Association International, vol. 37(2), pages 369-81, April.
- Michael A. Leeds & Sandra Kowalewski, 2001. "Winner Take All in the NFL," Journal of Sports Economics, The North American Association of Sports Economists, vol. 2(3), pages 244-256, August.
- Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-30, December.
- Bresnahan, Timothy F, 1981. "Duopoly Models with Consistent Conjectures," American Economic Review, American Economic Association, vol. 71(5), pages 934-45, December.
- Stefan KÃ‰senne, 2004. "Competitive Balance and Revenue Sharing," Journal of Sports Economics, The North American Association of Sports Economists, vol. 5(2), pages 206-212, May.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:55020. 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.