Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257120 
Year of Publication: 
2020
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 8 [Issue:] 3 [Article No.:] 71 [Publisher:] MDPI [Place:] Basel [Year:] 2020 [Pages:] 1-12
Publisher: 
MDPI, Basel
Abstract: 
This paper uses auction theory to explain the unique design of the 1998-2013 posting system agreed to between Major League Baseball and the Japanese Nippon Professional Baseball League that allowed for the transfer of baseball players from Japan to the United States. It has some similarities and many differences from the transfer system used to obtain players in European football. The unique features of the posting system were a compromise between Major League Baseball clubs and Nippon Professional Baseball clubs with the understanding that the former was a collusive group of club owners. Revenue sharing is a method to enforce a system of side payments to collusive bidders. It is then profit-maximizing to have the bidder with the highest net surplus from the player win the auction. Changes to the revenue sharing system used in Major League Baseball reduced the ability of club owners to bid for Japanese players, hence changes to the bidding rules of the posting system coincided at the same time.
Subjects: 
posting system
baseball
auction theory
collusion
JEL: 
L83
J42
Z22
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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