nep-spo New Economics Papers
on Sports and Economics
Issue of 2009‒01‒03
four papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. Strike Three: Umpires' Demand for Discrimination By Parsons, Christopher A.; Sulaeman, Johan; Yates, Michael C.; Hamermesh, Daniel S.
  2. A two-level competing values framework to measuring nonprofit organizational effectiveness By Balduck,A.; Buelens, M.
  3. Long-Term Contracts in Major League Baseball By Jahn K. Hakes; Chad Turner
  4. Expert Analysis and Insider Information in Horse Race Betting: Regulating Informed Market Behaviour By John Peirson

  1. By: Parsons, Christopher A. (University of North Carolina, Chapel Hill); Sulaeman, Johan (Southern Methodist University); Yates, Michael C. (Auburn University); Hamermesh, Daniel S. (University of Texas at Austin)
    Abstract: We explore how umpires' racial/ethnic preferences are expressed in their evaluation of Major League Baseball pitchers. Controlling for umpire, pitcher, batter and catcher fixed effects and many other factors, strikes are more likely to be called if the umpire and pitcher match race/ethnicity. This effect only exists where there is little scrutiny of umpires' behavior – in ballparks without computerized systems monitoring umpires' calls, at poorly attended games, and when the called pitch cannot determine the outcome of the at-bat. If a pitcher shares the home-plate umpire's race/ethnicity, he gives up fewer hits, strikes out more batters, and improves his team's chance of winning. The general implication is that standard measures of salary discrimination that adjust for measured productivity may be flawed. We derive the magnitude of the bias generally and apply it to several examples.
    Keywords: strategic interactions, worker evaluation, wage equations, economics of sports
    JEL: J44 J71
    Date: 2008–12
  2. By: Balduck,A.; Buelens, M. (Vlerick Leuven Gent Management School)
    Abstract: Theorists and researchers have contested the construct of organizational effectiveness for many years. As the study of organizational effectiveness in profit organizations is complex and muddled, studying the construct in nonprofit organizations may be even more troublesome due to their distinctive nature. This study contributes to the literature by presenting a two-level competing values approach to measuring nonprofit organizational effectiveness. The framework is comprised of two levels of analysis—management and program—which are proposed in the model of Sowa, Selden & Sandfort (2004). Moreover, the framework also captures the Competing Values Approach of Quinn and Rohrbaugh (1983). We apply our model to sports clubs and we discuss the practical implications of our framework.
    Keywords: Organizational effectiveness; Competing Values Approach; nonprofit.
    Date: 2008–10–26
  3. By: Jahn K. Hakes (Department of Economics & Management, Albion College); Chad Turner (Department of Finance & Economics, Nicholls State University)
    Abstract: Long-term deals are one tool that both players and franchises use to manage risk. That tool has been much discussed and empirically tested with respect to player shirking, and has more briefly, and only theoretically, discussed with respect to reducing variance in future payrolls. Our work looks at how patterns of use of long-term contracts are affected by changes in contracting rules established through collective bargaining and by expected changes in franchise revenue streams. To accomplish this, we have assembled the most complete dataset of MLB player contracts to date. We analyze changes in contract length and dollar value across players of different ability levels, at different points in their careers (contract status), by position, across CBA agreements, and further examine if new stadiums and new television deals impact contract terms. We confirm the earlier finding that player performance is systematically higher during contract years than during the early portion of a long-term contract. We also find that inclusion of contract length information significantly reduces the unexplained variation in player salaries.
    Keywords: Major League Baseball (MLB); long-term contracts; player salaries and performance; collective bargaining agreements (CBA)
    JEL: L83
    Date: 2008–12
  4. By: John Peirson
    Abstract: We present a new model analyzing the effect of uncertainty faced by bookmakers. It is shown that bettors with inside information or expert analysis decrease the odds set by profit maximizing bookmakers. Data on previously unraced two year old horses and those that have raced previously are used to examine the impact of the greater possibility of insider information on odds bias in relation to unraced horses. The price of a bet on unraced two year olds is found to be on average 15% higher and the effect varies as the probability of winning increases. The latter effect suggests a possible contribution to the favorite-longshot bias and the former shows the importance of insider information in the setting of market prices. The regulation of the use of insider information is discussed in the light of the similar impact of insider information and expert analysis on bookmaker odds.
    Keywords: Betting; Horseracing; Insider Information; Uncertainty
    JEL: D82 L83
    Date: 2008–12

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