Does the Baseball Labor Market Contradict the Human Capital Model of Investment?

Blass, Asher

doi:10.2307/2109657

Cited by 76 publications

(59 citation statements)

References 2 publications

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“…The only exception to this upward trend was a small time period before the 1986 and 1987 seasons where teams did not sign free agents, a period during which the owners were later found guilty of collusion and fined. Consistent with the figures above, econometric analysis of baseball player salaries shows players' pay was equal to (MacDonald and Reynolds, 1994;Marburger, 1994;Krautmann, 1999), or greater than (Blass, 1992;Oorlog, 1995) their marginal revenue product for this era.…”

Section: Rent Appropriationsupporting

confidence: 59%

Institutional settings and rent appropriation by knowledge‐based employees: the case of Major League Baseball

Chacar

Hesterly

2008

Manage Decis Econ

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We examine the role of institutional settings in determining rent appropriation by employees. Based on an inductive historical study of owner-player relations in Major League Baseball from the inception of professional baseball to the present, we show that both formal and informal institutional rules can dramatically influence rent appropriation. We draw upon anthropology research on social relations to understand how differences in informal norms regarding the social relations between the owners and the players affect appropriation. Our findings show that when social relations are defined by authority ranking, pay is determined more by fiat than by market forces or bargaining. Copyright © 2008 John Wiley & Sons, Ltd.

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Section: Rent Appropriationsupporting

confidence: 59%

Institutional settings and rent appropriation by knowledge‐based employees: the case of Major League Baseball

Chacar

Hesterly

2008

Manage Decis Econ

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“…This reflects the implicit assumption that experience has no independent effect on a player's contribution to team performance. A study by Blass [1992] provides a contrary view, finding an independent contribution of experience. Blass estimates the equation…”

Section: Previous Studies Of Salary Determination In Mlb and Npbmentioning

confidence: 92%

Labor Markets and National Culture: Salary Determination in Japanese Baseball

2011

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We analyze the determinants of salaries for players in Nippon Professional Baseball (NPB) using performance data from 2004 to 2006 and compensation data from 2005 to 2007. We find that salaries in NPB are determined by different factors than those that drive salaries in Major League Baseball (MLB). We also find that experience plays a significant role in salary determination, which suggests that the Japanese emphasis on seniority still holds in NPB. Finally, we show that free agency has relatively little impact on salaries in NPB, which suggests that players in NPB are subject to greater monopsony power than players in MLB.

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“…SBoth Blass [1992] and Kahane and Shmanske [1997] employed a measure of roster stability in examinations of attendance at Major League Baseball games. Berri, Schmidt, and Brook [2004] also utilized such a measure in an examination of consumer demand in the NBA.…”

Section: Concluding Observationsmentioning

confidence: 99%

Wage inequality and firm performance: Professional basketball's natural experiment

Berri

Jewell

2004

Atlantic Economic Journal

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The purpose of this inquiry is to utilize a natural experiment from professional basketball to examine how wage inequality impacts the productivity of the firm. The A Natural Experiment from Professional BasketballAn issue highlighted in the National Basketball Association's (NBA) 1998-99 labor strife was the disappearance of the league's middle class. While a few athletes had garnered the attention of the media for contracts in excess of 100 million dollars, a larger number of veteran players were playing at the minimum wage, albeit NBA style. 1 The changes in salary equity were primarily a result of the 1995 collective bargaining agreement (CBA). 2 Not only did this agreement increase the team payroll cap by 45 percent, it also eliminated the institution of restricted free agency. Hence, all players without a contract at the conclusion of the 1995-96 season were free to negotiate and sign with any team in the NBA. As a result, several organizations began the summer of 1996 with relatively empty rosters and significant amounts of money to spend on the acquisition of talent. The path taken by many of these teams was to devote a substantial amount of team payroll to a few star players. The remainder of the roster was then filled with players only offered the NBA minimum wage. 3Although the salad" trends observed in the 1990s were clearly not welcomed by a significant portion of the athletes employed by the N~A, such rapid changes in the distribution of salaries represent a natural experiment for economists wishing to understand how changes in pay inequality impact worker performance. Given that basketball is a team sport where cooperation among workers would appear critical for team success, how do increases in wage disparity impact firm performance. 7

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Does the Baseball Labor Market Contradict the Human Capital Model of Investment?

Cited by 76 publications

References 2 publications

Institutional settings and rent appropriation by knowledge‐based employees: the case of Major League Baseball

Institutional settings and rent appropriation by knowledge‐based employees: the case of Major League Baseball

Labor Markets and National Culture: Salary Determination in Japanese Baseball

Wage inequality and firm performance: Professional basketball's natural experiment

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