Edited by Neil Longley
Chapter 7: Pay dispersion and productivity in sports
Two competing theories related to pay dispersion – the tournament model versus the fairness model – are contrasted. The empirical work examines pay dispersion in the National Hockey League in the three seasons just prior to, and the three seasons just after, the 2004–2005 season-long work stoppage which ultimately resulted in a collective bargaining agreement that drastically compressed salaries in the league. The results lend strong support for the fairness model, meaning that lower within-team pay disparities results in, all else equal, higher team performance
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