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- Title
COMPETITIVE BALANCE AND FREE AGENCY IN MAJOR LEAGUE BASEBALL.
- Authors
Fishman, Peter
- Abstract
In 1976, the Basic Agreement introduced free agency to Major League Baseball; previously, the reserve clause gave a team indefinite monopsonistic rights to a player's services. Owners claimed that the new system would enable large market teams to destroy Major League Baseball's competitive balance. Coasian logic, however, would suggest that player allocation would not be affected by free agency. Because player distribution would not change, the Coase Theorem implies that free agency should have no effect on competitive balance. My paper tests this claim by developing an econometric model of competitive balance in Major League Baseball.
- Subjects
UNITED States; FREE agents (Sports); BASEBALL; COMPETITION; COMMERCE; RESTRAINT of trade; BASEBALL player recruiting; BASEBALL players
- Publication
American Economist, 2003, Vol 47, Issue 2, p86
- ISSN
0569-4345
- Publication type
Article
- DOI
10.1177/056943450304700208