The Economics of Sports

Directed primarily toward undergraduate students in the Sports Economics course, this text also provides practical content to current and aspiring industry professionals. Core economic concepts developed through examples from the sports industry. The sports industry provides a seemingly endless set of examples from every area of microeconomics, giving readers the opportunity to study economics in a context that holds their interest. The Economics of Sports explores economic concepts and theory-industrial organization, public finance, and labor economics-in the context of applications and examples from American and international 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