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Re: [APBR_analysis] Re: Player Movement

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  • Jim Armstrong
    ... Some other studies I ve read show similar results, though perhaps not as clear cut as suggested above. Also, the winning == payroll effects are more
    Message 1 of 14 , Sep 5, 2003
      On Thu, Sep 04, 2003 at 10:06:25PM -0700, Michael Tamada wrote:
      > I have not looked deeply into the literature, but at the Western Economics
      > Association meetings this summer, most of the economists who looked at the role
      > of payroll and winning used simultaneous equations techniques, which permit
      > measuring not just the impact of payroll on winning, but also the impact of
      > winning on revenue (and then payroll). The economists who presented at the
      > Society for American Baseball Research meetings also did so, when appropriate.
      > What was interesting to me was that, in the small number of presentations that
      > I saw, the simultaneity effects were modest. The payroll ==> winning effects
      > looked much larger than the winning ==> payroll effects, so much so that
      > ignoring the simultaneity didn't seem to affect the results much.
      > That was only a small handful of studies, I don't know what most studies have
      > shown.

      Some other studies I've read show similar results, though perhaps not as
      clear cut as suggested above. Also, the winning ==> payroll effects are
      more indirect and more difficult to measure. I also haven't yet seen many
      good arguments discussing which causalities are desirable for a sports

      I haven't heard much about the recent WEA/SABR meetings. Is there a summary
      of proceedings and/or listing of research presented available online anywhere?

      > >IMHO, the real key is to determine optimal levels of competitive (im)balance
      > >that would generate the most interest among fans worldwide, and ultimately
      > >generate the most revenue for the league. Then of course, figuring out
      > >the factors that lead to such levels is a whole different story.
      > Based on what I saw at the meetings, economists have only started to try
      > to come up with such measures. "What do fans want?" is another way of
      > stating the question, and though economists have for quite awhile been
      > trying to estimate how much fans respond to winning, it appears that the
      > research on how much fans respond to "competitiveness" is in its infancy.

      Yeah, what fans as a group say they want don't always show up in their
      actions. They may say they want lower ticket prices, but they continue
      to be willing to pay for higher prices. The Clippers vs. the Grizzlies
      might be a very evenly matched game of professional teams, but such a
      contest isn't in relative high demand.

      > to write stuff for the Cato Institute. A teensy bit of warning
      > there: the Cato Institute has an ideological axe to grind, one
      > in favor of markets and against government intervention. In
      > particular, whereas most average citizens and for that matter most
      > economists will have some concerns about the possible negative effects
      > of monopolies, cartels, and monopsonies, the Cato Institute will tend
      > to pooh-pooh such concerns.
      > So I think it's not a coincidence that this article acknowledges the
      > monopsonistic power that sports leagues have, but suggests that
      > this leads to an overall benefit to social welfare.
      > On the other hand, professional sports are one of the areas where
      > quite a few average citizens and economists will have that same
      > viewpoint -- that monopsony, a draft, etc. are not bad things in
      > pro sports. Also John Siegfried's been the Secretary for the
      > American Economic Association for years, so he's not exactly some
      > wild guy off the fringe (although even some of the AEA's presidents
      > have had some fairly extreme views, from Galbraith on the left to
      > the Chicago School guys on the right).

      Agreed. I'm not an economist, but what I've learned is that economists
      tend to have reputations, fairly or not, based on the institutions they
      represent. Perhaps part of this is that individuals with similar
      ideologies tend to gravitate together. To some extent this is true of any
      academic field, but seems to be particularly true for the field of economics.

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