Jason A. Winfree

Collective Reputation and Quality

Firms who sell regional or specialty products often share a collective reputation based on aggregate quality. Collective reputation can be approached as a dynamic common property resource problem. We show that for an experience good without firm traceability, individual firms have the incentive to choose quality levels that are sub-optimal for the group. These results support minimum quality standards. Trigger strategies are analyzed as an alternative solution to this problem. Finally, the implications of these results are discussed as they relate to the case study of Washington apples. Copyright 2005, Oxford University Press.

Fan substitution and the 2004-05 NHL lockout.

This study estimates fan substitution in sports using the 2004-05 National Hockey League (NHL) season-long lockout as a natural experiment. The authors find that NHL fans substitute minor league and junior league hockey for the NHL. Because this is not due to a change in the price of a substitute good, the findings point to pure substitution effects without income effects. The findings have implications for future work on fan demand, especially for those studying habit and loyalty, or sports policy.

Nash Conjectures and Talent Supply in Sports League Modeling A Comment on Current Modeling Disagreements

This paper attempts to resolve some of the confusion in the sports economics literature regarding conjectures, open and closed leagues, and the invariance principle in sports league modeling. Very few papers model talent level and talent investment by teams separately, which can create confusion regarding open and closed leagues. It is also important that researchers are able to differentiate between the level of talent investment a team makes and their actual talent level which depends on the type of league and the talent choices made by other teams.

Financial Incentives and League Policy: The Example of Major League Baseball's Steroid Policy

Abstract This paper illustrates possible changes in revenue from league drug policies. We argue that there were perceived financial incentives for Major League Baseball (MLB) to not have a steroid policy. MLB did not begin testing players for steroids in earnest until the 2005 season although the league office acknowledged use a decade and a half earlier. Only after outside pressure did the league implement a policy with specific, enforceable penalties. This paper uses regression analysis to assess whether the absence of a true steroid policy prior to 2005 affected scoring, then quantifies the amount of revenue baseball owners lost as a consequence of the updated steroid policy.

Further Examination of Potential Discrimination Among MLB Umpires

We address potential racial bias by Major League Baseball umpires with respect to ball–strike calls. We offer a number of econometric specifications to test the robustness of the results, adding the role of implicit and explicit monitoring as well as pitch location. Our analysis shows mixed results regarding the matching of umpire and pitcher race. We conclude that evidence of own-race bias is sensitive to specification and methodology. How results can differ based on different data sets, specifications, time periods, and race classifications are discussed.

Owners incentives during the 2004–05 National Hockey League lockout

This study shows that firm owners can indirectly benefit from work stoppages if they own other firms in substitute industries and gain market power for those other firms. The incentives of the owners are examined with a model of cross-ownership cartels and data from professional sports. Assuming that various professional sport events are substitutes, owners may increase profits by eliminating competition, even if they own the competition. This study shows that the recent National Hockey League (NHL) lockout caused a statistically significant increase in attendance for the National Basketball Association and junior hockey leagues. Given that many NHL owners own teams in these substitutable leagues, this could be construed as anti-competitive behaviour and may have prolonged the NHL lockout and helped NHL owners in collective bargaining. Given the public investment in sports facilities and market power in professional sports, this analysis calls for cross-ownership across professional sports to be questioned.

THE LAW OF GENIUS AND HOME RUNS REFUTED

In a lively, provocative article, DeVany claims inter alia that the size distribution of home runs follows a continuous “power law” distribution which is nested in a larger class of “stable” statistical distributions characterized by an infinite variance. He uses this putative fact about the size distribution of home runs to argue that concern about the use of steroids to enhance home run ability is necessarily misplaced. In this article, we show that the initial claim is false and argue that the subsequent claim about the potential importance of steroid use does not follow from the first. We also show that the method used to establish that the size distribution of home runs is characterized by an infinite variance is unreliable and will find evidence “consistent” with infinite variance in all but the most trivial of data sets generated by processes with finite variance. Despite a large and growing literature that spans several fields and uses methods and arguments similar to DeVany’s, we argue that mere inspection of the unconditional distribution of some human phenomenon is unlikely to yield much insight. (JEL C16, L83)

Ownership Structure between Major and Minor League Baseball

Abstract Some Major League Baseball (MLB) owners own a portion of their minor league affiliates while other owners have a player development contract or working agreement with all of their minor league affiliates. Even though MLB teams always own the rights to the players and coaches in their minor league system, there are many other aspects of their operations that might be outsourced. This study attempts to explain differences in minor league ownership. It is hypothesized that the relationship between major and minor league teams depends upon the MLB owners’ other businesses and the minor league affiliates’ level or classification. This study analyzes a cross-sectional data set from the Nation League using a probit model. The study finds that media providers that own MLB teams are more likely to own their minor league affiliates and MLB owners are more likely to own lower classified minor league teams.

Reply to Szymanski’s “Some Observations on Fort and Winfree ‘Nash Conjectures and Talent Supply in Sports League Modeling: A Comment on Current Modeling Disagreements.’”

1. We ‘‘claimed to clear up some confusion about the implications of contest theory and the game theoretic approach to modeling contests.’’ 2. We ‘‘claimed to show that the invariance principle can still survive in the game theoretic interpretation.’’ 3. Our suggested approach ‘‘was already fully and explicitly adopted . . . ’’ 4. ‘‘The invariance principle cannot hold for any plausible contest success function.’’

Regulating an Experience Good Produced in the Formal Sector of a Developing Country when Consumers Cannot Identify Producers

In developing countries, consumers can buy many goods either in formal markets or in informal markets and decide where to purchase based on the products price and anticipated quality. This pape assumes consumers cannot assess quality prior to purchase and cannot, at reasonable cost, identify who produced the good they are considering. Many products (meats, fruits, vegetables, fish, grains) sold both in formal groceries and, less formally, on the street fit this description. This paper also assumes that producers can adjust quality at a cost and only firms in the formal sector are subject to government regulation. In the long run, producers migrate to the sector that is more profitable. Using this model, we demonstrate how regulations in the formal sector can lead to a quality gap between formal and informal sector goods. Moreover, the paper investigates how changes in regulation affect quality, price, aggregate production, and the number of firms in each sector.