VROOMAN ECON 270/280 ZAM 1

1. Discuss the Coase theorem and explain how it relates to Rottenberg's weak form invariance proposition. What is Rottenberg's opinion of the real effects of each of the proposed institutional changes to the baseball players labor market? What is the Yankee paradox and according to Rottenberg, how will it be internalized, and what is the only way to "break up the Yankees"? Compare and contrast the strengths and weaknesses of Scully's and Quirk and Fort's sports league theories, with specific reference to their conclusions about the effects of revenue sharing.

2. Compare and contrast competitive balance (standard deviations) in MLB, NBA and NFL in the free agency period. Discuss how the general theory can explain the apparent revenue/competitive balance contradiction in MLB. Explain how a player's Marginal Revenue Product is determined and discuss how the interaction of two separate types of diminishing marginal returns relate to the recent acquisitions of Alex Rodriquez by New York Yankees and Carlos Beltran by the New York Mets. In specific terms of the general theory, discuss (and show) the effects of Gary Sheffield giving the NY Yankees a "discount"when he signed as free agent in 2004. Compare this to the Yankee premium early in 1990's.