Contract Options for Buyers and Sellers of Talent in Professional Sports (Hardcover, 1st ed. 2020)

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.

General

Imprint:	Springer Nature Switzerland AG
Country of origin:	Switzerland
Series:	Palgrave Pivots in Sports Economics
Release date:	September 2020
First published:	2020
Authors:	Duane W. Rockerbie • Stephen T Easton
Dimensions:	210 x 148mm (L x W)
Format:	Hardcover
Pages:	97
Edition:	1st ed. 2020
ISBN-13:	978-3-03-049512-1
Categories:	Books > Business & Economics > Economics > Labour economics > General Books > Business & Economics > Economics > Econometrics > General Books > Business & Economics > Industry & industrial studies > Service industries > Sport & leisure industries
LSN:	3-03-049512-4
Barcode:	9783030495121

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