ABSTRACT

Sports occupy a unique place in the public psyche. Although sports generate less revenue than many other industries, sports results are predicted, reported, and analyzed in newspapers, magazines, books, and TV and radio programs. This text presents economic models from industrial organization, public finance, and labor economics to provide insight into the economics of sports. As you read the text, you will learn about the largest sports leagues in North America and Europe as well as mega-events like the Olympics and their power to illuminate economic theory. Other topics include sports gambling, the role discrimination plays in sports, and the unique place the NCAA has in promoting intercollegiate sports. The chapter closes with an example of one of the most important economic models: comparative advantage. Despite having an absolute advantage as both a pitcher and an outfielder and hitter, Babe Ruth specialized in playing the outfield because he had a comparative advantage at hitting over pitching.