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Of Bricks and Bats: New Stadiums, Talent Supply and Team Performance in Major League Baseball

Author

Listed:
  • Rockerbie, Duane W
  • Easton, Stephen

Abstract

This paper considers whether publicly-financed new facility investments encourage professional sports team owners to increase their investments in costly talent. We develop a model of a sports league that incorporates publicly-financed facility investments, the unique characteristics of the talent market, and revenue sharing to explore the complementarity between new facility amenities, the team budget decision and team performance. Our empirical results suggest that publicly-financed new stadiums do little to improve team performance, not due to restrictions in the talent market, but rather due to a lack of fan response.

Suggested Citation

  • Rockerbie, Duane W & Easton, Stephen, 2016. "Of Bricks and Bats: New Stadiums, Talent Supply and Team Performance in Major League Baseball," MPRA Paper 77430, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:77430
    as

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    File URL: https://mpra.ub.uni-muenchen.de/77430/1/MPRA_paper_77430.pdf
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    References listed on IDEAS

    as
    1. Dennis Coates & Brad R. Humphreys, 2005. "Novelty Effects Of New Facilities On Attendance At Professional Sporting Events," Contemporary Economic Policy, Western Economic Association International, vol. 23(3), pages 436-455, July.
    2. Lindh, Thomas, 1992. "The inconsistency of consistent conjectures : Coming back to Cournot," Journal of Economic Behavior & Organization, Elsevier, vol. 18(1), pages 69-90, June.
    3. Bodvarsson, Örn B. & Humphreys, Brad R., 2009. "Labor Market Discrimination and Capital Investment: The Effects of Fan Discrimination on Stadium Investment," IZA Discussion Papers 4551, Institute for the Study of Labor (IZA).
    4. Kaitlyn Harger & Brad R. Humphreys & Amanda Ross, 2016. "Do New Sports Facilities Attract New Businesses?," Journal of Sports Economics, , vol. 17(5), pages 483-500, June.
    5. Rodney Fort & James Quirk, 2007. "Rational Expectations And Pro Sports Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 374-387, July.
    6. Matthew Walker & Michael J. Mondello, 2007. "Moving Beyond Economic Impact: A Closer Look at the Contingent Valuation Method," International Journal of Sport Finance, Fitness Information Technology, vol. 2(3), pages 149-160, August.
    7. Stephen T. Easton & Duane W. Rockerbie, 2005. "Revenue Sharing, Conjectures, and Scarce Talent in a Sports League Model," Journal of Sports Economics, , vol. 6(4), pages 359-378, November.
    8. Christopher M. Clapp & Jahn K. Hakes, 2005. "How Long a Honeymoon? The Effect of New Stadiums on Attendance in Major League Baseball," Journal of Sports Economics, , vol. 6(3), pages 237-263, August.
    9. Dennis Coates, 2007. "Stadiums And Arenas: Economic Development Or Economic Redistribution?," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 565-577, October.
    10. Paul Madden, 2011. "Game Theoretic Analysis of Basic Team Sports Leagues," Journal of Sports Economics, , vol. 12(4), pages 407-431, August.
    11. Humphreys, Brad R. & Zhou, Li, 2015. "Sports facilities, agglomeration, and public subsidies," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 60-73.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    new stadiums; talent supply; baseball; winning percentage;

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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