| Description |
This dissertation explores economic behavior of producers in the U.S. sports industry. The fundamental research questions are: (1) Can business efficiently operate under competitive and noncompetitive environment? (2) Whether or not the difference in competitive abilities leads to industry consolidation? This dissertation uses three cases to investigate the research questions at different angles. The first essay studies the managerial efficiencies in the Major League Baseball using Stochastic Frontier regressions. It discovers that cost efficiency is not related to wins. Although, cost inefficiency is associated with teams that spend more on players, especially pitchers, who is found to be less important to team wins. What more related to victories are the amount of money put in the payrolls and how efficient teams use players to produce wins. However, the technical inefficiency has grown bigger in the recent years. The second essay explores the bidding behavior of National Basketball Association teams for free-agent players, using a comparison of marginal revenue and marginal cost of wins as the judgment. Contradicts other studies that compare salaries with marginal revenue product of players, this study finds that the "winner's curse" does not exist and that teams do not over spend on players. The reason wages are higher than the marginal revenue product can be because of the bargaining power the player union exercised over the shares of teams' fixed income to raise players' salaries. The final essay studies the advertising behavior of the ski industry using the Choice-Base Conjoint analysis. It discovers that smaller ski resorts are less competitive as they face budget constraint. They do not try to compete with bigger operators and could be the reason why the number of ski resorts in the U.S., especially the small ones, has been shrinking recently. |
