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- Title
Leveling the playing field: The distributional impact of maximum‐ and minimum‐level contracts on player compensation.
- Authors
Kaplan, Scott M.
- Abstract
How does the presence of maximum‐ and minimum‐level contract restrictions impact (i) superstar compensation and (ii) the distribution of compensation across an industry? Using ticket price and observed player talent data from the National Basketball Association (NBA), I estimate expected salaries for each player as well as their value to the NBA as a whole. I find the ratio of actual to expected salary is 2.8%–56.9% for the most talented players, resulting in subsidization to less talented players. The findings also suggest the most talented players generate significantly more value to the NBA than their actual and expected salaries.
- Subjects
NATIONAL Basketball Association; BASKETBALL; TICKET sales; VALUE (Economics); CONTRACTS
- Publication
Contemporary Economic Policy, 2024, Vol 42, Issue 2, p375
- ISSN
1074-3529
- Publication type
Article
- DOI
10.1111/coep.12621