Book Reviews

• DOI: 10.1177/0003603X7502000411
• Author: Jon P. Nelson
• Date: 01 December 1975
• Published date: 01 December 1975
• Subject Matter: Book Reviews

Henry

G. Demmert,

The

Economics

of

Professional

Team

Sports, Lexington, Mass.: D. C.

Heath

and

Company

(1973), ix +106 pp., $10.00.

This

book is a

short

but

excellent

addition

to the growing

industrial

organization

literature

which explicitly uses

the

maximizing

paradigm

of neoclassical microeconomics to gen-

erate

empirically testable hypotheses. Although much of

the

analysis

pertains

to professional baseball

during

the

period

1951 to 1969, the

author

offers

various

comments on

the

eco-

nomics of

other

professional

team

sports

(football, basket-

ball, hockey) as well.

The

book can be divided into

three

parts.

The first

part,

consisting of

chapters

1

through

3, is an overview of the

peculiar economics of professional

sports,

especially

the

pro-

duction

externality

problem

that

finds the firm

and

its

rivals

engaged in the production of a

joint

product, the game.

The

second

part,

chapters

4

and

5, is a theoretical and empirical

test

of a model of team quality

determination;

the theoretical

model is a version of

theCournot

oligopoly model with both

price

and

product

quality

as decision variables.

The

third

part,

chapter

6, contains the empirical

results

of the model

and

their

implications

for

public policy

toward

professional

team sports.

Economists

tend

to view organizations

as

devices

for

the

collective internalization of externalities.

The

cartel

struc-

ture

of professional

sports,

Demmert

argues,

is a device

for

the

internalization of

both

technical

and

pecuniary

exter-

nalities.

Standardization

of the

product

through

the adoption

of a

uniform

set of definitions

and

playing

rules, minimum

acceptable quality

criteria,

"public

image"

standards,

ad-

vance scheduling of games, and, to some extent,

territorial

rights

are

devices

that

reflect

the

joint

nature

of the produc-

tion process.

In

addition,

certain

overtly

collusive practices

are

tolerated

among firms in

the

form

of monopsony control

over

player

talent-the

reserve

system

and

the

player

draft-

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