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Wage Levels And Agency Problems In Professional Team Sports

Author

Listed:
  • José Manuel Sánchez SANTOS

    (Department of Applied Economics, University of A Coruña, Spain)

  • José Atilano Pena LÓPEZ

    (Department of Applied Economics, University of A Coruña, Spain)

Abstract

This paper seeks to provide theoretical foundations to address the effects of the asymmetric information inherent to contractual relationships between teams and players in professional team sports. Particularly, a Shapiro-Stiglitz efficiency model version along with Rosen’s insight about superstars economics is used to show that in addition to the high demand (i.e. marginal productivity) is necessary to consider a moral hazard problem as a source or as an explanatory factor of the rigidity and inflation that characterize sport superstars wages. The importance attributed to this approach lies in the fact that taking the results of the analysis as a reference, some ways of reinforcing players observance of internal team norms, reducing the costs of supervision and some channels of capping the non-shirking remuneration can be proposed.

Suggested Citation

  • José Manuel Sánchez SANTOS & José Atilano Pena LÓPEZ, 2011. "Wage Levels And Agency Problems In Professional Team Sports," The Annals of the "Stefan cel Mare" University of Suceava. Fascicle of The Faculty of Economics and Public Administration, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration, vol. 11(1(13)), pages 60-74, June.
    • Handle: RePEc:scm:ausvfe:v:11:y:2011:i:1(13):p:60-74
    as

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