The Economics of Sports

1. Economics and Sports

Introduction

1.1The Organization of the Text

1.2 Babe Ruth and Comparative Advantage

Summary

Discussion Questions

Problems

2. Review of the Economist’s Arsenal

Introduction

2.1  The Supply and Demand Model

2.2  Producing Output and the Production Function.

2.3 Market Structures: From Perfect Competition to Monopoly

2.4 The Rise of Professional Sports

Summary

Discussion Questions

Problems

APPENDIX 2A

2A.1  Constrained Maximization

2A.2  Using Indifference Curves and Budget Constraints: The Rise of Soccer and Baseball

APPENDIX 2B

3. Sports Franchises as Profit-Maximizing Firms

Introduction

3.1 Maximizing Profits or Maximizing Wins?

3.2 A Closer Look at Revenues, and Costs

3.3 Taxes, Profit, and Owner Behavior

3.4 The Importance of Leagues

3.5 Soccer’s Alternative Business Model

Summary

Discussion Questions

Problems

4. Monopoly and Antitrust

Introduction

4.1 What’s Wrong with Monopoly?

4.2 Strategic Pricing and Price Discrimination

4.3 What’s Right with Monopoly?

4.5 Society’s Response to Monopoly and Monopsony: Antitrust Laws

4.6 The NCAA: An Incidental Cartel

4.7 Prisoner’s Dilemma: How Rational Actions Lead to Irrational Outcomes

Summary

Discussion Questions

Problems

APPENDIX 4A

5. Competitive Balance

Introduction

5.1 Why Fans and Owners Want Competitive Balance

5.2 Measuring Competitive Balance

5.3 Attempts to Alter Competitive Balance

Summary

Discussion Questions

Problems

6. The Public Finance of Sports: Who Benefits and How?

Introduction

6.1 How How Teams Benefit from New Facilities

6.2 How Fans Benefit from a New Facility

6.3 How Cities Benefit from Teams, Facilities, and Events

Summary

Discussion Questions

Problems

7. The Public Finance of Sports: Who Pays and Why?

Introduction

7.1 How Cities Came to Fund Stadiums

7.2 How Teams Exploit Monopoly Power

7.3 Stadium Location and Costs

7.4 Stadium Costs and Financing

7.5 Paying for Stadiums

Summary

Discussion Questions

Problems

8. An Introduction to Labor Markets in Professional Sports

Introduction

8.1 An Overview of Labor Supply and Labor Demand

8.2 The Economics of Tournaments and Superstars

8.3 Tournaments, Cheating, and the Distribution of Income

Summary

Discussion Questions

Problems

APPENDIX 8A

9. Labor Market Imperfections

Introduction

9.1 The Monopsony Power of Sports Leagues

9.2 Unions in Professional Sports

9.3 Labor Conflict and Compromise in Collective Bargaining

Summary

Discussion Questions

Problems

10. Discrimination

Introduction

10.1 Becker’s Theory of Labor Discrimination

10.2 Different Forms of Discrimination in Professional Sports

10.3 Title IX and Discrimination in College Sports

Summary

Discussion Questions

Problems

11. The Economics of Amateurism and College Sports

Introduction

11.1 The Troublesome Concept of Amateurism

11.2 The Costs and Benefits of College Athletics

11.3 The Role of the NCAA

11.4 The Returns to the Athlete

Summary

Discussion Questions

Problems

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