nep-spo New Economics Papers
on Sports and Economics
Issue of 2010‒10‒23
six papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Heterogeneous Worker Ability and Team-Based Production: Evidence from Major League Baseball, 1920-2009 By Papps, Kerry L.; Bryson, Alex; Gomez, Rafael
  2. The impact of mega-sport events on tourist arrivals By Johan Fourie; María Santana-Gallego
  3. An Economic Model of the Evolution of the Gender Performance Ratio in Individual Sports By Dupuy Arnaud
  4. Major League Baseball and Globalization: The World Baseball Classic By Mark, Nagel; Matt, Brown; Daniel, Rascher; Chad, McEvoy
  5. Illustrations of Price Discrimination in Baseball By Daniel, Rascher; Andrew, Schwarz
  6. Simulation in Sport Finance By Joris, Drayer; Daniel, Rascher

  1. By: Papps, Kerry L. (University of Oxford); Bryson, Alex (National Institute of Economic and Social Research); Gomez, Rafael (University of Toronto)
    Abstract: A detailed longitudinal dataset is assembled containing annual performance and biographical data for every player over the entire history of professional major league baseball. The data are then aggregated to the team level for the period 1920-2009 in order to test whether teams built on a more even distribution of observed talent perform better than those teams with a mixture of highly able and less able players. The dependent variable used in the regressions is the percentage of games a team wins each season. We find that conditioning on average player ability, dispersion of both batting and pitching talent displays an optimal degree of inequality, in that teams with too high or too low a spread in player ability perform worse than teams with a more balanced distribution of offensive and defensive talent. These findings have potentially important applications both inside and outside of the sporting world.
    Keywords: baseball, skill dispersion, firm performance
    JEL: L23 L25 L83 M51
    Date: 2010–09
  2. By: Johan Fourie (Department of Economics, University of Stellenbosch); María Santana-Gallego (Department of Economics, La Laguna University, Spain)
    Abstract: While a mega-sport event is scheduled at least once every year somewhere in the world, these events are rare occurrences for the host cities and countries. The benefits of such events seem lucrative; the very fact that many countries bid to host these events suggests that the benefits – be they tangible or intangible – more often than not outweigh the costs. Using a standard gravity model of bilateral tourism flows between 200 countries from 1995 to 2006, this paper measures a very direct benefit of such mega-events: the increase in tourist arrivals to the host country. In general, results suggest that mega-events promote tourism but the gain varies depending on the type of mega-event, the participating countries, the host country’s level of development, and whether the event is held during the peak season or off season.
    Keywords: Sport mega-events, tourism, World Cup, Olympic Games, trade
    JEL: L83 F19
    Date: 2010
  3. By: Dupuy Arnaud (ROA rm)
    Abstract: This paper shows that gender world record ratio in four disciplines, i.e. marathon, triplejump, pole vault and 800 meters, follows a S-shape over time. It is argued that thispattern is initiated by a sudden drop in the social barrier for women to participate inthese disciplines. This drop in social barrier materializes -later- by the authorization forwomen to participate at major events, such as the Olympic Games, in these disciplines.The paper builds a simple economic model of sector self-selection and human capitalaccumulation with intrinsic disutility (social barriers) to participate in some sectors.As social barriers are removed in a sector, the Gender Performance Ratio is show tofollow a S-shape over time under very basic assumptions and calibrations. Ability selfselection,measured as the difference between mean ability of women in that sector andpopulation mean, becomes more positive after removal of the social barrier.
    Keywords: education, training and the labour market;
    Date: 2010
  4. By: Mark, Nagel; Matt, Brown; Daniel, Rascher; Chad, McEvoy
    Abstract: In addition to generating initial profits, the WBC has positioned MLB to be the leader in growing the game of baseball and the commercial aspects of the sport throughout the world. As baseball grows, and more importantly as the American brand of baseball grows, it will be interesting to watch the worldwide reaction – particularly if MLB begins to generate huge profits overseas. Other prominent American brands such as Coke, Nike, Disney, and McDonalds have been both embraced and scorned as they have ventured beyond the fifty U.S. states. MLB will have unique challenges, but also tremendous opportunities as they attempt to expand their potential marketplace from 330 million consumers to the entire world. Ultimately, the long-term impact of the initial World Baseball Classic will not be known for many years, but it appears that the initial tournament met, and in some cases, exceeded expectations.
    Keywords: World Baseball Classic; WBC; globalization
    JEL: F59 L83
    Date: 2010
  5. By: Daniel, Rascher; Andrew, Schwarz
    Abstract: Price discrimination of this nature, focused on differing degrees of quality, bundled goods, volume discounts, and other forms of second-degree price discrimination, is commonplace in MLB. Indeed, it is safe to say that every single MLB ticket is sold under some form of price discrimination. As teams grow increasingly sophisticated in their pricing strategies, price discrimination is becoming more precise, more wide-spread, and more profitable, while at the same time providing for more opportunities for more fans to find tickets at a price they are willing to pay. Unlike a baseball game, where one team must lose and one must win, price discrimination allows for win-win economic outcomes for teams and fans alike.
    Keywords: price discrimination; bundling; variable pricing; dynamic pricing; secondary ticketing; two-part tariff; loaded ticket
    JEL: L83 D4
    Date: 2010
  6. By: Joris, Drayer; Daniel, Rascher
    Abstract: Simulations have long been used in business schools to give students experience making real-world decisions in a relatively low-risk environment. The OAKLAND A’S BASEBALL BUSINESS SIMULATOR takes a traditional business simulation and applies it to the sport industry where sales of tangible products are replaced by sales of an experience provided to fans. The simulator asks students to make decisions about prices for concessions, parking, and merchandise, player payroll expenses, funding for a new stadium, and more. Based on these inputs, the program provides detailed information about the state of the franchise after each simulated year, including attendance, winning percentage, revenues vs. expenses, revenue sharing, and stadium financing. The use of simulations such as this one enhances students’ organizational skills and students’ ability to think critically and imaginatively about the data while applying relevant knowledge and an appropriate strategy to achieve the best possible results. This is particularly important in the field of sport management where few, if any, other simulators exist that are specific to the field.
    Keywords: baseball business; computer-based learning; simulation/gaming; stadium/facility financing; sport finance; sport management
    JEL: L83
    Date: 2010

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