Daniel, Rascher (1999): A Test of the Optimal Positive Production Network Externality in Major League Baseball. Published in: Sports Economics: Current Research (1999)
Download (241kB) | Preview
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.
|Item Type:||MPRA Paper|
|Original Title:||A Test of the Optimal Positive Production Network Externality in Major League Baseball|
|Keywords:||uncertainty of outcome; censored regression; cluster correlation; demand; baseball; network externality|
|Subjects:||D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
L - Industrial Organization > L8 - Industry Studies: Services > L83 - Sports ; Gambling ; Restaurants ; Recreation ; Tourism
|Depositing User:||Daniel Rascher|
|Date Deposited:||12. Oct 2010 19:54|
|Last Modified:||30. Dec 2015 13:37|
Borland, Jeff, and Jenny Lye. 1992. ``Attendance at Australian Rules Football: A Panel Study.'' Applied Economics, v24, n9, September: 1053-1058.
Cairns, J., N. Jennett, and P.J. Sloane. 1986. ``The Economics of Professional Team Sports: A Survey of Theory and Evidence.'' Journal of Economic Studies 13: 1-80.
Demmert, Henry G. 1973. The Economics of Professional Team Sports. Lexington, Mass., Lexington Books.
Domazlicky, Bruce R., and Peter M. Kerr. 1990. ``Baseball Attendance and the Designated Hitter.'' American Economist, v34, n1, Spring: 62-68.
Fort, Rodney, and James Quirk. 1995. ``Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues.'' Journal of Economic Literature 33, No. 3: 1265-1299.
Hoang, Ha, and Daniel Rascher. 1999. “The NBA, Exit Discrimination, and Career Earnings.” Industrial Relations. (forthcoming).
Hill, J.R., H. Madura, and R.A. Zuber. 1982. ``The Short Run Demand for Major League Baseball.'' Atlantic Economic Journal, Vol 31 (2): 31-35.
Jennett, Nicholas I. 1984. ``Attendances, Uncertainty of Outcome and Policy in Scottish League Football.'' Scottish Journal of Political Economy 31, No. 2: 176-198.
Knowles, Glenn, Keith Sherony, and Mike Haupert. 1992. ``The Demand for Major League Baseball: A Test of the Uncertainty of Outcome Hypothesis.'' The American Economist, vol. 36, No. 2, Fall: 72-80.
Neale, Walter. 1964. “The Peculiar Economics of Professional Sports.” Quarterly Journal of Economics 78: 1-14.
Noll, Roger G. 1974. ``Attendance and Price Setting.'' Government and the Sports Business. Edited by Roger G. Noll. Brookings Institution. Pg. 115-157.
Peel, David, and Dennis Thomas. 1988. ``Outcome Uncertainty and the Demand for Football: An Analysis of Match Attendances in the English Football League.'' Scottish Journal of Political Economy, vol. 35 (3), August: 242-49.
Places Rated Almanac. 1989. New York, NY: Prentice Hall.
Rascher, Daniel. 1997. “A Model of a Professional Sports League.” Advances in the Economics of Sport, Volume II. Edited by Wallace Hendricks. Pgs. 27 - 76.
Scully, Gerald W. 1974. ``Discrimination: The Case of Baseball.'' Government and the Sports Business. Edited by Roger G. Noll. Brookings Institution. Pg. 221-73.
Scully, Gerald W. 1989. The Business of Major League Baseball. Princeton Press.
Siegfried, J.J., and J.D. Eisenberg. 1980. ``The Demand for Minor League Baseball.'' Atlantic Economic Journal, Vol. 8 (2): 59-69.
Staples, Brent. 1987. ``Where are the Black Fans?'' The New York Times Magazine. May 17. Pg. 27.
Welki, Andrew M, and Thomas J. Zlatoper. 1994. ``US Professional Football: The Demand for Game-Day Attendance in 1991.'' Managerial and Decision Economics, v15, n5, Sep/Oct: 489-495.