Market Power

Musings by an academic economist on the power of markets and the power over markets.

Thursday, March 24, 2005

Big Talk

Tonight was the night. I gave my talk on public subsidization of sports teams and how those subsidies affect team franchise values. The gist: sports teams are not the boons to local economies they are purported to be. Team franchise values will be enhanced if they own stadiums relative to if they play in public stadiums. So why do they seek subsidies? Because the enhancement isn't large enough and because teams possess and use market power to extract subsidies from governments.

A nice complement to my talk was blogged today by John Chilton. It's well worth reading.