In contrast to major league baseball, the National Basketball Association has a salary cap designed to provide every team an equal and fair chance of competing for the championship. The Miami Heat's recent incredible success in signing the game's three most hotly desired free agents, including...

Using a sample of professional baseball players from 1871-2007, this paper aims at analyzing a longstanding empirical observation that married men earn significantly more than their single counterparts holding all else equal (the "marriage premium"). Baseball is a unique case study because it...

A first difference econometric method is employed to assess the incentives created by contracts. Data from quarterbacks in the NFL is used to identify whether shirking occurs after significant salary increases. We find that a QB's rating decreases, interceptions become more frequent while...

We examine the effects of variations in player compensation on NFL franchise performance from 1994 to 2004. Evidence shows that team success depends significantly upon both the actual and perceived fairness of pay distribution. Specifically, proficiency relative to that of competitors is high...

Among the popular conversation topics for Canadians, few evoke emotions as strong as hockey and defending one's favorite team. Despite its prevalence, there remains little conclusive proof to settle many of the common debates between fans. One of the most popular and divisive issues in the...

How to properly compensate and incentivize players is an important question in the realm of professional sports, and more broadly, is a central question in contract design. With the increasing use of performance-based compensation packages and tax law favoring such compensation design, a natural...

We study the determinants of superstar wage effects, asking whether productivity or popularity-based explanations are more appropriate. We use longitudinal wage and performance data for workers (players) and firms (teams) from a particular market for sports talent: Major League Soccer (MLS) in...

Using panels of player pay and performance from Major League Baseball (MLB), we examine trends in player productivity and salaries as players age. Pooling players of all ability levels leads to a systematic bias in regression coefficients. After addressing this problem by dividing players into...

This paper estimates the association between salary dispersion and the probability that an NBA team leading two minutes before the end of a playoff game won the game. Economic theory indicates the a priori relationship is ambiguous and the existing empirical literature finds mixed results as to...

Intuition and sports knowledge suggest the most talented professional footballers play for the best teams, i.e. positive assortative matching based on productivity. We consider Major League Soccer between 2007 and 2017. We estimate a wage equation, finding that player and team fixed wage...