Abstract
This chapter concludes our development of the real options approach to salary negotiations and the salary anomaly in professional sports. We begin with a simple empirical test that relates player surpluses to contract lengths and find supporting evidence. We close the book by pointing out shortcomings in our real options model that can be addressed by future research.
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Notes
- 1.
A White heteroskedasticity test rejected the null hypothesis of no heteroskedasticity at a very high level of confidence. The 2000 season is excluded as a fixed effect variable.
- 2.
We thank Wladimir Andreff for this idea.
References
Andreff, W. (2013). Building blocks for a disequilibrium model of a European team sports league. International Journal of Sport Finance, 9, 20–38.
Rockerbie, D. (2009). Strategic free agency in baseball. Journal of Sports Economics, 10(4), 278–291.
Zimbalist, A. (2011). Circling the bases: Essays on the challenges and prospects of the sports industry. Philadelphia: Temple University Press.
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Rockerbie, D.W., Easton, S.T. (2020). Concluding Remarks. In: Contract Options for Buyers and Sellers of Talent in Professional Sports. Palgrave Pivots in Sports Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-49513-8_5
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DOI: https://doi.org/10.1007/978-3-030-49513-8_5
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