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Hidden monopsony rents in winner‐take‐all markets—sport and economic contribution of Spanish soccer players
Author(s) -
GarciadelBarrio Pedro,
Pujol Francesc
Publication year - 2007
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.1313
Subject(s) - monopsony , economic rent , league , economics , profit (economics) , microeconomics , empirical evidence , value (mathematics) , labour economics , astronomy , machine learning , philosophy , physics , epistemology , computer science
In labor markets where few companies compete for many workers, economic theory predicts monopsony rents. Surprisingly, soccer clubs do not profit from the expected rents. The purpose of this study is to explain such contradictory evidence. Our model and empirical test, using data obtained from the Spanish professional soccer league for the season 2001/2002, suggests that monopsony rents that the clubs were to obtain from most of the soccer players would eventually revert to the superstars. The study also illustrates that the market value of players stems both from their sporting performance and their economic contribution. Copyright © 2007 John Wiley & Sons, Ltd.