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Free Agency and the Concentration of Player Talent in Major League Baseball

Author

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  • Craig A. Depken II

    (University of Texas at Arlington)

Abstract

This article investigates whether the removal of the reserve clause in professional baseball affected the concentration of player talent in the industry. After free agency, a few wealthy teams could purchase the best players over time, leading to a high concentration of productive players and adversely affecting the competitive nature of the industry. To investigate his possibility, the Herfindahl-Hirschman Index, and the deviation of the index from its ideal, for home runs, strike outs and runs scored is related to structural changes in professional baseball. Free agency reduced the concentration of home runs but not of strike outs or runs scored. These findings are consistent with increased player mobility but not with monopolization by a minority of teams.

Suggested Citation

  • Craig A. Depken II, 2002. "Free Agency and the Concentration of Player Talent in Major League Baseball," Journal of Sports Economics, , vol. 3(4), pages 335-353, November.
    • Handle: RePEc:sae:jospec:v:3:y:2002:i:4:p:335-353
    DOI: 10.1177/152700250200300403
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    References listed on IDEAS

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    Cited by:

    1. Jennifer K. Ashcraft & Craig A. Depken, 2020. "The introduction of the reserve clause in Major League Baseball: evidence of its impact on select player salaries during the 1880s," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 14(1), pages 105-128, January.
    2. Camilla Mastromarco & Marco Runkel, 2009. "Rule changes and competitive balance in Formula One motor racing," Applied Economics, Taylor & Francis Journals, vol. 41(23), pages 3003-3014.
    3. Ryan A. Kent & Steven B. Caudill & Franklin G. Mixon, 2013. "Rules changes and competitive balance in European professional soccer: evidence from an event study approach," Applied Economics Letters, Taylor & Francis Journals, vol. 20(11), pages 1109-1112, July.
    4. Martin B. Schmidt, 2021. "The Competitive Returns To The Global Search For Talent: Professional Sports Markets And Foreigners," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 396-419, January.
    5. P. Owen & Michael Ryan & Clayton Weatherston, 2007. "Measuring Competitive Balance in Professional Team Sports Using the Herfindahl-Hirschman Index," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(4), pages 289-302, December.
    6. Alexander John Bond & Francesco Addesa, 2020. "Competitive Intensity, Fans’ Expectations, and Match-Day Tickets Sold in the Italian Football Serie A, 2012-2015," Journal of Sports Economics, , vol. 21(1), pages 20-43, January.
    7. Thomas J. Miceli, 2003. "A Principal-Agent Model of Contracting in Major League Baseball," Working papers 2003-01, University of Connecticut, Department of Economics.
    8. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    9. Martin B. Schmidt & David J. Berri, 2005. "Concentration of Playing Talent," Journal of Sports Economics, , vol. 6(4), pages 412-419, November.
    10. Thomas J. Miceli, 2004. "A Principal-Agent Model of Contracting in Major League Baseball," Journal of Sports Economics, , vol. 5(2), pages 213-220, May.

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