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Agency Behavior in a Nonprofit Setting: Effects of the 1984 Supreme Court NCAA Decision

  • Kathleen A. Carroll

    ()

  • Brad R. Humphreys

    ()

The NCAA is commonly viewed as a cartel. We model the cartel relationship between the member teams and the NCAA central organization as a principal-agent relationship. Our model predicts imperfect agency behavior on the part of the NCAA with corresponding overregulation relative to the level preferred by the member teams. We empirically test the model by examining the impact of the 1984 Supreme Court decision that reassigned the telecast rights for intercollegiate football from the NCAA to the individual member teams. Our empirical estimates of telecasts, attendance, and competitive balance support the prediction of imperfect agency behavior by the NCAA.

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File URL: http://www.umbc.edu/economics/wpapers/wp_03_106.pdf
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Paper provided by UMBC Department of Economics in its series UMBC Economics Department Working Papers with number 03-106.

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Length: 29 pages
Date of creation: Oct 2003
Date of revision:
Handle: RePEc:umb:econwp:03106
Contact details of provider: Postal: UMBC Department of Economics 1000 Hilltop Circle Baltimore MD 21250, USA
Phone: 410-455-2160
Fax: 410-455-1054
Web page: http://www.umbc.edu/economics

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  1. E. Eckard, 1998. "The NCAA Cartel and Competitive Balance in College Football," Review of Industrial Organization, Springer, vol. 13(3), pages 347-369, June.
  2. Martin B. Schmidt & David J. Berri, 2001. "Competitive Balance and Attendance: The Case of Major League Baseball," Journal of Sports Economics, , vol. 2(2), pages 145-167, May.
  3. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
  4. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
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