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Palgrave Pivots in Sports Economics

Contract Options for Buyers and Sellers of Talent in Professional Sports

Authors: Rockerbie, Duane W, Easton, Stephen T.

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  • Examines salary formation in Major League Baseball in the light of real option theory
  • Seeks to clarify the connections between salary and marginal revenue product for professional baseball players
  • Demonstrates how to calculate the value of real options to the baseball player and the team owner
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eBook 42,79 €
price for Spain (gross)
  • ISBN 978-3-030-49513-8
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Hardcover 51,99 €
price for Spain (gross)
  • ISBN 978-3-030-49512-1
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About this book

This Palgrave Pivot re-examines salary formation in Major League Baseball in light of real option theory to clarify the connection between salary and marginal revenue product for professional baseball players. Current literature has tended to treat single-year and multi-year contracts similarly, ignoring the potential option value for teams and for players. Recent work points to the observation that both high-productivity and low-productivity athletes have salaries that systematically differ from their marginal revenue product, and that free agents signing multi-year contracts are overpaid relative to free agents signing one-year contracts. This book argues that the value of signing an athlete to a contract should be determined similarly to the determination of the value of an investment project or a financial asset. This book demonstrates how to calculate the value of real options to the player and the team owner with a simple two-year contract, and offers extensions to the real options model for multiyear contracts or when a player is early or late in his career.

About the authors

Duane W. Rockerbie is Professor in the Department of Economics at the University of Lethbridge, Canada. He is a member of the editorial board of the Journal of Sports Economics and is a past Vice-President of the North American Association of Sports Economists (NAASE).
Stephen T. Easton is Professor in the Department of Economics at Simon Fraser University, Canada, 

Table of contents (5 chapters)

Table of contents (5 chapters)

Buy this book

eBook 42,79 €
price for Spain (gross)
  • ISBN 978-3-030-49513-8
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Hardcover 51,99 €
price for Spain (gross)
  • ISBN 978-3-030-49512-1
  • Free shipping for individuals worldwide
  • Immediate ebook access, if available*, with your print order
  • Usually ready to be dispatched within 3 to 5 business days.
  • The final prices may differ from the prices shown due to specifics of VAT rules

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Bibliographic Information

Bibliographic Information
Book Title
Contract Options for Buyers and Sellers of Talent in Professional Sports
Authors
Series Title
Palgrave Pivots in Sports Economics
Copyright
2020
Publisher
Palgrave Macmillan
Copyright Holder
The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG
eBook ISBN
978-3-030-49513-8
DOI
10.1007/978-3-030-49513-8
Hardcover ISBN
978-3-030-49512-1
Series ISSN
2662-6438
Edition Number
1
Number of Pages
XI, 97
Number of Illustrations
8 b/w illustrations, 1 illustrations in colour
Topics

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