Losing money to make money: The benefits of redistribution in collective bargaining in sports

• 成果类型: Article
• 署名作者: Vohra, Akhil
• 署名单位: University System of Georgia; University of Georgia
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2023.08.006
• 发表日期: 2023
• 页码: 226-242
• 关键词: Majority-rule bargaining; Collective bargaining; Negotiation; unions

摘要

I develop a model of majority-rule collective bargaining between a sports league and its players when delay costs incurred by players are wealth-dependent. I propose a refinement of subgame perfect equilibrium that requires equilibrium strategies to be immune to deviations by any majority subgroup. I show this is equivalent to giving the player with median bargaining power the unilateral ability to negotiate with the league. Using this model, I demonstrate that policies reallocating surplus from high-talent to moderate-talent players, such as maximum contracts in professional sports, can improve the welfare of all players. Redistribution of surplus harmonizes players' interests, giving a majority of them a greater stake in the bargaining outcome. The model highlights the gains to be had if a heterogeneous group agrees to concessions that increase the alignment of their individual interests.& COPY; 2023 Elsevier Inc. All rights reserved.