ACCOUNTING FOR COMPLEMENTARY SKILL SETS: EVALUATING INDIVIDUAL MARGINAL VALUE TO A TEAM IN THE NATIONAL BASKETBALL ASSOCIATION

Identifying an individual worker's contribution to firm production can be difficult in a team setting where spillovers in labor productivity exist among team members. This paper studies a model of labor productivity where workers have heterogeneous abilities, and can differently affect the productivity of their fellow teammates. Applying the model to the setting of the National Basketball Association (NBA), I can identify the marginal value that a basketball player brings to a particular team lineup, both through his own individual contributions and his complementary contribution to teammates' productivity. Estimates from the model imply that teammates have a significant impact on individual player productivity, and that taking into account spillovers across teammates is important to assessing both overall team productivity and an individual player's contribution to team productivity. I then evaluate whether player complementarities are valued in the NBA labor market in terms of higher salaries, and find that they are undervalued, and that players are instead paid mainly for their individual offensive production. This creates an asymmetry between player incentives and the team objective. To assess the size of this inefficiency, the top trading cycle algorithm of Shapley and Scarf (1974) is used to identify a Pareto optimal matching between players and teams, that accounts for the complementarities between heterogeneous players' skill sets. (JEL J30, L25, L83, M51)     

Evidence of Skill and Strategy in Daily Fantasy Basketball

Using hand-collected data from DraftKings.com, a major daily fantasy sports website, we analyze draft selections of thousands of participants in daily fantasy basketball (DFB). In our study, the first thorough examination of DFB, we show that DFB is a game in which skill is necessary for success. Using econometric analysis, we find that winning participants utilize different strategies than losing participants; for example, winning participants more frequently select NBA rookies and international players. We also find that participants paying to enter more lineups in a given contest earn profits far more often than those entering few lineups, indicating that the number of lineups entered can serve as a proxy for skill. Additionally, we provide a thorough discussion of industry characteristics, prior literature, and gameplay, which should help readers familiarize themselves with this burgeoning fantasy sports variant. This study should further the literature on the contentious activity, which has been outlawed in many U.S. states and continues to elicit controversy.     

INTERRACIAL WORKPLACE COOPERATION: EVIDENCE FROM THE NBA

Using data from the National Basketball Association (NBA), we examine whether patterns of workplace cooperation occur disproportionately among workers of the same race. We find that, holding constant the composition of teammates on the floor, basketball players are no more likely to complete an assist to a player of the same race than a player of a different race. Our confidence interval allows us to reject even small amounts of same‐race bias in passing patterns. We find some evidence of own‐race bias in situations where the outcome of a particular play is less important. Our findings suggest that high levels of interracial cooperation can occur in a setting where workers are operating in a highly visible setting with strong incentives to behave efficiently. (JEL J15, J71, L23)     

Exit Discrimination in the NBA: A Duration Analysis of Career Length

Using a panel study of annual NBA data (1989–99) we do not find evidence of exit discrimination on career length in the NBA. This result is inconsistent with results from data in the 1980s but is consistent with more recent findings that have measured wage discrimination in sports in the 1990s. In our semiparametric duration analysis, we find that performance variables are important in determining career length. These results suggest that team owners in the pursuit of championships keep talented players regardless of race. This is an affirmation of Becker's theoretical implications of market competition on discrimination. (JEL J71 , J23 )     

Race and the Likelihood of Managing in Major League Baseball

The impact of race on the likelihood of former Major League Baseball players becoming managers is analyzed using data from 1975 to 2008. The multivariate probit model presented controls for the effects of race, performance, star status, education, coaching, minor league managing, and playing experience. Marginally significant evidence is found that black former players are 74 % less likely to become managers at the major league level than observationally equivalent white former players. It is also observed that former catchers and shortstops are the most likely to become coaches or managers. Historically, black players have been underrepresented at the catcher and shortstop positions and overrepresented at the outfield positions. This provides evidence that historical differences in position played may have contributed to the relatively small number of black managers in Major League Baseball. Significant evidence is found that Hispanic former players are 66 and 69 % less likely to coach in the major leagues and manage in the minor leagues than observationally equivalent white former players. Coaching and minor league managing experience increase the likelihood of managing in the major leagues. Therefore, discrimination at these levels may lead to a lower number of Hispanic major league managers. It should be noted that while this study does control for education it does not directly control for English language skills. If Hispanic players are less likely to speak English than white players this may contribute to the negative effect found in this analysis. It is also shown that all star status reduces the likelihood of coaching or managing while seasons spent in the majors increase the likelihood of coaching or managing. This implies that players with long but unexceptional careers are most likely to become managers. This finding may reflect the greater opportunities available to star players after retirement.     

The Differential Effects of Racially Homophilous Sponsorship Ties on Job Opportunities in an Elite Labor Market: The Case of NCAA Basketball Coaching

We examine how an assistant coach's race and the race of his supervisor (the head coach) interact to affect future job quality. While past research argues that homophily is beneficial to job mobility, we find differential effects based on the race. OLS and OLR regression analyses on the quality of one's first head coaching job in NCAA men's basketball indicate that black assistant coaches working under black head coaches (black homophily) are significantly disadvantaged compared to all other racial combinations: white assistants with white supervisors (white homophily), white assistants with black supervisors (white heterophily), and black assistants with white supervisors (black heterophily). In contrast, there is no significant difference in job quality among the latter three groups: white homophily, white heterophily, and black heterophily. This indicates that while homophily is neither advantageous nor disadvantageous for whites, it is disadvantageous for black job candidates. This racially based disadvantage makes it difficult for minority job candidates to break through the glass ceiling and has real‐world financial implications.     

RACE AND EMPLOYMENT OUTCOMES: EVIDENCE FROM NBA COACHES

We study the impact of management diversity on employment outcomes using data on NBA head coaches that includes information on the race of each coach and his supervisor. We find that a supervisor is more likely to hire a coach of his own race. We also find that black coaches are less likely to be rehired to a second job within three years than their white counterparts, and that a head coach's race affects the quality of the opportunities he is offered. These findings are stronger for first-time coaches than experienced coaches, suggesting that observable information on performance mitigates bias. (JEL J0, J4, J7)     

Crisis communication in higher education: The use of “negotiation” as a strategy to manage crisis

This case study examined the crisis response strategies of Louisiana State University after its women's head basketball coach resigned amid charges of inappropriate conduct with former basketball players. This case study draws on relationship management and negotiation as the theoretical lens to examine the efforts of the University in managing relationships and restoring its image. Data for this study was collected through opened-ended questionnaires from students, faculty, and staff at the University. The findings from this study indicate that the good reputation of the University was responsible for the positive evaluation of the crisis management. In addition, results from this study suggest that “negotiation” can play an important role in managing a crisis when the conflicting parties are not willing to participate in a dialogue.     

DO EMPLOYERS PAY FOR CONSISTENT PERFORMANCE?: EVIDENCE FROM THE NBA

In a world of uncertainty in which a worker's performance is variable over time and average performance is unknown when hiring, how will employers determine compensation? We develop a monitoring and signaling model where information is symmetric and parties are risk neutral. Monitoring costs increase with inconsistency, lowering pay for inconsistent workers. If discrimination exists, minority workers will be rewarded less than majority workers for improving consistency. Testing these and other predictions using National Basketball Association data, we find that consistent professional basketball players are paid more, but, in contrast to previous studies, there is no evidence of discrimination. (JEL J3, J7)     

DETERMINANTS OF REVENUE IN SPORTS LEAGUES: AN EMPIRICAL ASSESSMENT

This study investigates determinants of revenue in North America's four major professional sports leagues. Revenue is positively associated with on‐field success in baseball (MLB), basketball (NBA), and hockey (NHL), but not in football (NFL). The returns to success are not diminishing as commonly assumed, which casts doubt on the uncertainty of outcome hypothesis, and differences across leagues are consistent with revenue sharing arrangements. Estimates indicate a strong negative but diminishing relationship between stadium age and revenue. Teams in larger markets generate more revenue than smaller markets, but the returns to success do not differ according to market size. (JEL Z21)     

PLAYING FOR KEEPS: PAY AND PERFORMANCE IN THE NBA

This paper examines contract-related incentive effects using a unique dataset on individual performance and individual contracts. Evidence from professional basketball players in the 1980s and 1990s shows that individual performance improves significantly in the year before signing a multi-year contract but declines after the contract is signed. One interpretation is that workers strategically increase effort to obtain the most lucrative, multi-year contract but then reduce it once the contract is locked in. This highlights the double-edged nature of long-term contracts: good for employers when workers are fighting for them, but less so when workers have them. ( JEL J22, J3)     

COACHING TEAM PRODUCTION

The actual function of managers is the subject of much debate. Using data on more than 3000 male college basketball players, their coaches, and their skill levels, we find a positive and significant relation between our ability to replicate an individual coach's allocation of playing time across players and his winning percentage. Although this result does not answer the central question of just what it is that managers contribute, the results do support the property rights paradigm: managers are the employees of workers; and more generally, sports data can be used to help understand related economic processes where quantifiable measures of inputs and outputs are more costly to obtain. “What is meant by performance? Input energy, initiative, work attitude, perspiration, rate of exhaustion? Or output?…sometimes by inspecting a team member's input activity we can better judge his output effect…It is not always the case that watching input activity is the only or best means of detecting, measuring, or monitoring output effects of each team member, but in some cases it is a useful way.”     

Implementing sociology in secondary schools

Using data from the National Educational Longitudinal Survey, I explore whether there are gender and race differences in the effects of participation in a variety of sports on achievement in four domains. While results suggest that selection accounts for some of the sports effects and perhaps gender differences found in prior research, the achievement benefits of playing other team sports (not softball or basketball) and individual sports appear to be greater and more consistent for white female participants than for others particularly in the three achievement domains (Mathematics, Science, and History) where females trail males in average test scores.     

INCIDENCE AND CONSEQUENCES OF RISK‐TAKING BEHAVIOR IN TOURNAMENTS—EVIDENCE FROM THE NBA

We empirically explore the relevance and efficiency of risk‐taking behavior in tournaments. We use data from the National Basketball Association (NBA) and measure risk‐taking by the fraction of three‐point shots in basketball games. We examine how point differences between teams during games affect their subsequent risk‐taking behavior. It is found that teams that are trailing are more likely to increase their use of three‐point shots. We additionally analyze the consequences of this change in behavior. Enhanced risk‐taking is inefficient in the vast majority of cases and is only beneficial if a team is trailing by a rather large margin. We discuss possible explanations for these decision errors. (JEL M5, D81, J30)     

Allocation of resources in asymmetric competitions: How do the weak maintain a chance of winning?

To maintain a chance of occasionally beating a stronger player in a competition waged over several fields, a weaker player should give up on some of the fields and concentrate resources on the remaining ones. But when do weak players actually do this? And which fields do they give up when the fields differ in their likelihood of being assessed? We report an experimental study of resource allocation in which asymmetric pairs of players compete over asymmetric fields. Symmetric players and symmetric fields are used for control. We find that players behave as follows: (1) Average wins are the same in the symmetric and asymmetric fields conditions and correspond to relative player strength. (2) The proportion of fields given up on decreases with a player’s greater relative strength, increases for asymmetric field likelihoods, and increases when competitions are framed in meaningful context; this proportion is related to wins. (3) When field likelihoods are asymmetric, players’ resource allocation is correlated with likelihood. Wins generally increase with that correlation but the relation is different for players of different strength. (4) The proportion of fields given up on and the correlation with likelihood change with experience towards the values corresponding to higher wins.     

Firm-specific human capital, job matching, and turnover: evidence from major league baseball, 1900–1992

The two dominant labor market turnover hypotheses, the firm-specific human capital model (FSHCM) and the job-matching model, suggest different patterns of player mobility in major league baseball. The matching hypothesis predicts greater mobility of players in positions that require substantial team production. A better match may offer large productivity gains. Alternately, the FSHCM predicts players in positions requiring the greatest amount of teamwork will benefit from specific knowledge, making them less likely to change teams. We examine the frequency distribution of trades by player position from 1900–1992 and find the FSHCM provides the best explanation for turnover in this industry.     

Free agency,owner incentives,and the national football league players association

In an effort to raise salaries in professional football, the National Football League Players Association (NFLPA) has demanded that NFL owners set aside 55 percent of gross revenues to fund a union wage scale. An alternative means of raising salaries, as evidenced by the relatively higher earnings in major league baseball and professional basketball, is through a free agent system wherein players are free to sell themselves in the open market. This paper examines the NFLPA’s claim that free agency will not work in the NFL because owners lack the financial incentive to win that would induce them to bid on free agents.     

Rule enforcement in a public setting: The case of basketball officiating

This participant observation study examines some of the definitional and dramaturgical work performed by basketball officials attempting to enforce formal rules in the presence of audiences (e.g., spectators, coaches, players and fellow officials). Our analysis begins with the discovery that officiating requires participation in both a real world of physical events and objects, and a social world of subjective identifications. Second, we explore the contexts of legitimation by which decisions are justified. Third, we identify dramaturgical strategies used by officials to enhance legitimacy in the face of problematic decisions. Finally, we consider the assumptions officials make about the character of their work. The paper concludes with a discussion of indexical and interpretive features of organizational and bureaucratic use of formal rules, including the case of basketball officiating.An earlier draft of this paper was presented at the annual meeting of the Southern Sociological Society, Knoxville, Tennessee, March, 1980. We would like to thank Michael Hughes and James Michaels for abetting suggestions and comments. The authors share equal responsibility for the paper; the names have been listed alphabetically.     

ARE SUNK COSTS IRRELEVANT? EVIDENCE FROM PLAYING TIME IN THE NATIONAL BASKETBALL ASSOCIATION

We use playing time in the National Basketball Association to investigate whether sunk costs affect decision making. Behavioral economics implies that teams favor players chosen in the lottery and first round of the draft because of the greater financial and psychic commitment to them. Neoclassical economics implies that only current performance matters. We build on previous work in two ways. First, we better capture potential playing time by accounting for time lost to injuries or suspension. Second, we use regression discontinuity to capture changes when a player's draft position crosses thresholds. We find that teams allocate no more time to highly drafted players. (JEL L83, J23, D03)     

COLLEGE FOOTBALL TELECASTS: WHERE ARE THEY GOING?

Observed Nielsen ratings for college football games show a decreasing trend in the number of viewers in recent years. As the market for these telecasts becomes more competitive, both buyers and sellers should adjust rights fees for quality differences. A model of full income allocation is proposed to isolate pure quality changes from true changes. Using a sample of weekly national collegiate telecasts the optimum optimorum is determined from the set of generalized Box-Cox forms. Regional data provide an application of the model. Quality and hedonic indexes show not only a deterioration in quality over time but also a downward trend in demand for quality-adjusted units. Implications for alternative television policies are discussed.