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Institutional Change and Factor Movement in Major League Baseball: An Examination of the Coase Theorem’s Invariance Principle

Institutional Change and Factor Movement in Major League Baseball: An Examination of the Coase... One version of the Coase Theorem suggests that the distribution of resources is invariant to the assignment of rights. The lack of real world examples has made empirical tests difficult. However, such a ‘rights’ change did occur in Major League Baseball in the 1970s where the ‘rights’ of players were switched from owners to players. We examine whether this change impacted the distribution of players. In the end, the characteristics of player movement do appear to have been impacted by the re-assignment of rights and therefore, calls into question the relevance of this version of the Coase Theorem. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Institutional Change and Factor Movement in Major League Baseball: An Examination of the Coase Theorem’s Invariance Principle

Review of Industrial Organization , Volume 39 (3) – Jul 6, 2011

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References (48)

Publisher
Springer Journals
Copyright
Copyright © 2011 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
DOI
10.1007/s11151-011-9308-6
Publisher site
See Article on Publisher Site

Abstract

One version of the Coase Theorem suggests that the distribution of resources is invariant to the assignment of rights. The lack of real world examples has made empirical tests difficult. However, such a ‘rights’ change did occur in Major League Baseball in the 1970s where the ‘rights’ of players were switched from owners to players. We examine whether this change impacted the distribution of players. In the end, the characteristics of player movement do appear to have been impacted by the re-assignment of rights and therefore, calls into question the relevance of this version of the Coase Theorem.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Jul 6, 2011

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