The Economics of Baseball Contraction

SIEPR Discussion Paper No. 01-015

35 Pages Posted: 4 Aug 2003

See all articles by Roger G. Noll

Roger G. Noll

Stanford University - Department of Economics

Date Written: March 2003

Abstract

In 2001, baseball announced plans to eliminate two teams. This essay examines the economics of contraction, including its effects on economic welfare and the incentives confronting the remaining teams. Using baseball's financial data, all teams have a positive net social benefit, but surviving teams are estimated to benefit by over $1 billion from contracting the two weakest teams.

Keywords: baseball, sports leagues

JEL Classification: L83

Suggested Citation

Noll, Roger G., The Economics of Baseball Contraction (March 2003). SIEPR Discussion Paper No. 01-015, Available at SSRN: https://ssrn.com/abstract=416760 or http://dx.doi.org/10.2139/ssrn.416760

Roger G. Noll (Contact Author)

Stanford University - Department of Economics ( email )

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