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What Is Right With Scully Estimates of a Player’s Marginal Revenue Product

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  • Anthony C. Krautmann

Abstract

The author responds to an article in this edition by Bradbury (in press), which suggests that the free-market approach to estimating a player’s marginal revenue product (MRP) is limited. The author begins by reviewing a number of empirical issues that potentially limit the Scully approach, then turn to Bradbury’s concerns about the free-market approach. The author close by noting that these two methods are not competing nor is one necessarily superior to the other—each method has its own merits in terms of answering different types of questions related to a player’s value.

Suggested Citation

  • Anthony C. Krautmann, 2013. "What Is Right With Scully Estimates of a Player’s Marginal Revenue Product," Journal of Sports Economics, , vol. 14(1), pages 97-105, February.
    • Handle: RePEc:sae:jospec:v:14:y:2013:i:1:p:97-105
    DOI: 10.1177/1527002511419299
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    References listed on IDEAS

    as
    1. Anthony C. Krautmann & James Ciecka, 2009. "The Postseason Value of an Elite Player to a Contending Team," Journal of Sports Economics, , vol. 10(2), pages 168-179, April.
    2. Anthony C. Krautmann & Margaret Oppenheimer, 2002. "Contract Length and the Return to Performance in Major League Baseball," Journal of Sports Economics, , vol. 3(1), pages 6-17, February.
    3. Krautmann, Anthony C, 1999. "What's Wrong with Scully-Estimates of a Player's Marginal Revenue Product," Economic Inquiry, Western Economic Association International, vol. 37(2), pages 369-381, April.
    4. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-930, December.
    5. AC. Krautmann & E. Gustafson & L. Hadley, 2000. "Who pays for minor league training costs?," Contemporary Economic Policy, Western Economic Association International, vol. 18(1), pages 37-47, January.
    6. John D. Burger & Stephen J. K. Walters, 2008. "The Existence and Persistence of a Winner's Curse: New Evidence from the (Baseball) Field," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 232-245, July.
    7. Marios Michaelides, 2010. "A New Test of Compensating Differences: Evidence on the Importance of Unobserved Heterogeneity," Journal of Sports Economics, , vol. 11(5), pages 475-495, October.
    8. John L. Solow & Anthony C. Krautmann, 2011. "A Nash Bargaining Model of the Salaries of Elite Free Agents," Journal of Sports Economics, , vol. 12(3), pages 309-316, June.
    9. Joel G. Maxcy, 2004. "Contract Length as Risk Management When Labor is not Homogeneous," LABOUR, CEIS, vol. 18(2), pages 177-189, June.
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    Citations

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    Cited by:

    1. Rodney Fort & Young Hoon Lee & Taeyeon Oh, 2019. "Quantile Insights on Market Structure and Worker Salaries: The Case of Major League Baseball," Journal of Sports Economics, , vol. 20(8), pages 1066-1087, December.
    2. Jin Lee & Young Hoon Lee, 2021. "Development of a Win Production Function and Evaluation of Cross-Sectional Dependence," Journal of Sports Economics, , vol. 22(4), pages 412-431, May.
    3. Lisa A. Giddings & Michael Haupert, 2019. "Earning Like a Woman: Salaries versus Marginal Revenue Products in the AAGBPL and MLB: 1947-1952," Journal of Sports Economics, , vol. 20(2), pages 198-217, February.
    4. Bill Gerrard, 2014. "Achieving transactional efficiency in professional team sports: the theory and practice of player valuation," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 12, pages 189-202, Edward Elgar Publishing.
    5. Roger D. Blair & Brad R. Humphreys & Hyunwoong Pyun, 2017. "Monopsony Exploitation in Professional Sport: Evidence from Major League Baseball Position Players, 2000–2011," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(5), pages 676-688, July.
    6. Anthony C. Krautmann, 2017. "Risk-Averse Team Owners and Players’ Salaries in Major League Baseball," Journal of Sports Economics, , vol. 18(1), pages 19-33, January.
    7. Terry, Ryan P. & McGee, Jeffrey E. & Kass, Malcolm J., 2018. "The not-so-free agent: Non-performance factors that contribute to free agent compensation premiums," Sport Management Review, Elsevier, vol. 21(2), pages 189-201.
    8. Peter K. Hunsberger & Seth R. Gitter, 2015. "What is a Blue Chip Recruit Worth? Estimating the Marginal Revenue Product of College Football Quarterbacks," Journal of Sports Economics, , vol. 16(6), pages 664-690, August.
    9. Anthony C. Krautmann, 2018. "Contract Extensions," Journal of Sports Economics, , vol. 19(3), pages 299-314, April.
    10. Rockerbie, Duane & Easton, Stephen, 2019. "A Real Options Approach to Multi-Year Contracts in Professional Sports," MPRA Paper 93062, University Library of Munich, Germany.

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