The Golden Anniversary of “The Baseball Players’ Labor Market”

Abstract

Rottenberg’s “The Baseball Players’ Labor Market” holds the original ideas behind many threads of the sports economics literature. Most well known, the article contains both the invariance proposition (IP) and the uncertainty-of-outcome hypothesis. But there is also a rather complete specification of attendance demand and much more. Given this, it is strange that the IP has been “morphed” into the Coase theorem in portions of the sports economics literature. Rottenberg deserves better than footnote status, and an insightful empirical test is lost in this transformation. This article documents this and tests the IP directly on an occurrence missed so far in the literature (but also documented by Rottenberg) to point out the continued importance of the IP, even up to the golden anniversary of its original publication.