Should all baseball teams be competitive?
Questions:
Read John J. Siegfried's
article on "Sports Player Drafts and Reserve Systems".
- Explain how the combination of a player draft and a reserve system can create a monopsony labor market.
- Does Siegfried suggest that the reserve system will result in "competitive balance?" Why or why not?
- Does Siegfried argue that "balanced" teams are efficient from an economic perspective? Explain.
- Carefully explain the determinants of a player's marginal revenue product for a particular team.
- Why might the marginal revenue product of a high-quality player be higher in some markets than in others?
