Ec 1630 Study Guide (Final)-1

Ec 1630 Study Guide (Final)-1 - Ec 1630 Final Study Guide...

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Unformatted text preview: Ec 1630 Final Study Guide Contributors: "Alan Ibrahim" <alan.ibrahim@gmail.com>, "Alex Chang" <achang88@fas.harvard.edu>, "Chelsea Wen Si Zhu" <wszhu@fas.harvard.edu>, "Colin Morris" <cmorrislbj11@gmail.com>, "Eunji Chung" <eunji2007@gmail.com>, "Frances Yun" <fyun668@gmail.com>, "Jeff Ye" <jeffzye@gmail.com>, "Jon Mizrahi" <jonmizrahi@gmail.com>, "Katie Ericksen" <kericks@fas.harvard.edu>, "Katherine Petti" <kpetti@fas.harvard.edu>, "Kiran Bhat" <bhat@fas.harvard.edu>, "Kristen Calandrelli" <kcalandrelli10@college.harvard.edu>, "Michael Katzer" <mjkatzer@fas.harvard.edu>, "Ryan Schell" <rschell@fas.harvard.edu>, "Stephanie Shing" <smshing@gmail.com>, "Sumorwuo Zaza" <szaza89@gmail.com>, "Tim Walsh" <twalsh@fas.harvard.edu>, "Tommy Li" <tommyrli@gmail.com>, Lecture notes 3/23, 3/25, 3/30, 4/2 (by Kristen Calandrelli) March 23 3 Tier Systems and Franchise Values-Compared to an all free-agent system, reserve clause keeps salaries low. Payroll under an all free agent system would be higher-So a 3 tier system lowers payroll and thus increases franchise value-Franchise valuation-High/Low ratio measures inequality in distribution of franchise values-Football has low ratio most equal distribution of revenues-Gate sharing 60/40-Nationwide TV contract split among all teams-Most sot sport Parity & New Teams-Why is parity too difficult to maintain when a new team enters?-New teams finish below .500-Existing teams must stock new team wont stock them with the best players Statistical Discrimination-Racial profiling-Assuming that when you choose between 2 player, you choose the black for certain functions and the white for others-Evaluating by stereotype, not the individual Salary Discrimination-Unequal pay for equal performance OR equal salaries for unequal performance-Scullys regressions -Same regression for blacks and whites-Arithmetic amount of disc. Is a constant dollar amount-Run as log - % of discrimination is constant-Separate regressions for black and white variables-Discrimination depends on level of performance Market Structure-Need a central league-Uniform rules, schedules championships-Teams are independently owned (except soccer)-Can set ticket prices, arrange for their own TV network/contract, reserve right to sell stadiums-How does a league impose its will to ensure parity?-Gate sharing-Salary cap min and max salary expenditures-Revenue sharing-Luxury taxes-Is the league or team the unit of decisionmaking?-Zimbalist: For some things it makes sense to have league, not others 3/25: Midterm Day I dont have notes for 3/30, sorry! April 2 93% of football teams are given stadiums-Even with voting, other checks and balances, teams getting subsidies-Quirk and Fort Study-Given city/team contract, the team covers the operating costs (paying shares of concessions, etc)-Stadium subsidy city doesnt charge team full amount for stadium. No stadium comes close to covering the cost of building the stadium-Subsidy types:...
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Ec 1630 Study Guide (Final)-1 - Ec 1630 Final Study Guide...

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