Publication
The Economics of Baseball Contraction (Revised March 2003)
In 2001, baseball announced plans to fold two teams. This essay examines the economics of contraction, including its effects on economic welfare and the incentives of remaining teams. Using baseball financial data, all teams are found to have a positive social benefit, but the remaining teams are estimated to benefit by over $1 billion from contracting the two weakest teams.
Publication Date
January, 2002