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Of Bricks and Bats: New Stadiums, Talent Supply and Team Performance in Major League Baseball

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  • Rockerbie, Duane W
  • Easton, Stephen

Abstract

This paper considers whether publicly-financed new facility investments encourage professional sports team owners to increase their investments in costly talent. We develop a model of a sports league that incorporates publicly-financed facility investments, the unique characteristics of the talent market, and revenue sharing to explore the complementarity between new facility amenities, the team budget decision and team performance. Our empirical results suggest that publicly-financed new stadiums do little to improve team performance, not due to restrictions in the talent market, but rather due to a lack of fan response.

Suggested Citation

  • Rockerbie, Duane W & Easton, Stephen, 2016. "Of Bricks and Bats: New Stadiums, Talent Supply and Team Performance in Major League Baseball," MPRA Paper 77430, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77430
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    References listed on IDEAS

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    1. Dennis Coates & Brad R. Humphreys, 2005. "Novelty Effects Of New Facilities On Attendance At Professional Sporting Events," Contemporary Economic Policy, Western Economic Association International, vol. 23(3), pages 436-455, July.
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    Cited by:

    1. Rockerbie, Duane & Easton, Stephen, 2021. "Multiple Equilibria and Unsustainable Runs in Major League Baseball: More Evidence," MPRA Paper 109971, University Library of Munich, Germany.
    2. Anna Bykova & Dennis Coates, 2022. "Professional team sporting success: do economic and personal freedom provide competitive advantages?," Economics of Governance, Springer, vol. 23(3), pages 323-358, December.
    3. 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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    More about this item

    Keywords

    new stadiums; talent supply; baseball; winning percentage;
    All these keywords.

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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