Historical Perspectives on Sports Economics
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Historical Perspectives on Sports Economics

Lessons from the Field

Edited by John K. Wilson and Richard Pomfret

The sports sector, apart from being of economic significance in itself, is clearly one that many citizens share a great interest in. It is not mere results, but aspects such as history, statistics, interest in labour markets and finances that often spark people’s interest. Historical Perspectives on Sports Economics explores a variety of topics including mega-event analysis, sports governance, anthropometrics, gambling, industrial organisation, infrastructure development and racial issues. 
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Chapter 7: Incomplete contracting, league governance, and the role of the commissioner in Japanese and North American professional baseball

Akihiko Kawaura and Sumner La Croix

Abstract

Professional baseball leagues in North America and Japan have similar institutions governing their sport. All Major League Baseball (MLB) teams and Nippon Professional Baseball (NPB) teams are governed by associations of team owners who make major decisions and hire a commissioner to enforce rules, manage league operations, and preserve the integrity of baseball. We present narrative histories of the role of the commissioner in MLB and NPB and conclude that MLB owners have typically delegated more authority to the commissioner than NPB owners. We find that NPB and MLB commissioners differ with respect to their age at hire, length of the contract term, and their tenure on the job. Our tentative explanation rests on cross-country differences in the extent of scandals affecting the integrity of the game, the relative power of teams with large fan bases in league decision making, and the stronger position of NPB teams vis-à-vis their players.

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