Market Power

"Professors Urge U.S. Antitrust Review of Football Bowl System"

From InsideHigerEd.com:

A group of economics and law professors has urged the Justice Department to investigate whether the Bowl Championship Series violates federal antitrust law, The Wall Street Journal reported. The letter to the department's antitrust division, which was signed by 21 professors and lawyers, asks the agency to find college football's current mechanism for determining a national champion to be a cartel that favors BCS members over other college teams.

The NCAA has already been shown to be bound by US antitrust law when it comes to the negotiation of media rights (the NCAA v. the Board of Regents of the University of Oklahoma).  But this is a different animal:  the determination of a champion.  A league needs to determine rules that define the champion and this must be done collectively.  Moreover, defining thiese rules is not in and of itself a restriction of competition.  I am not a lawyer, but it seems the single entity defense may apply.

But if the league - in this case the NCAA - is restricting access to the championship, then my untrained legal mind suggests that the single entity defense is not a sufficient defense in this case.  Yes, collective action is needed to set championship rules, but those rules should apply to all league members, not just the most popular one.

150 Years Ago Today, The US Civil War Started

Today marks the 150th anniversary of the Confederacy's attack on Fort Sumter.  Thus started the greatest conflict of Americans vs. Americans in US history.  For those wanting to learn more about the history of the Civil war, I found two sources indispensable.  The first is the trilogy by Shelby Foote.  A southerner, his writing provides an excellent presentation of both sides of the story.

The other sources is Ken Burns' epic documentary "The Civil War" which first appeared on PBS in the late 1980's.  Using unique techniques, he takes photos and narration to provide the feeling of movement so watching the documentary doesn't feel like looking at a photo album.  Like Foote, he presents both sides in a balanced manner.

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Markets in Everything - Fans for Hire

And you thought that political activists were the only ones to hire people to give vocal support for their causes.  Think again:

Houston football player Justin Johnson was excited to have the Final Four in his town, but he never thought he'd get a chance to see a game live.

That was until Monday morning when an email went out to Houston athletes and the Rice student body giving the first 300 email responders free tickets courtesy of the Connecticut athletic department.

"Well, we all were excited to have the Final Four in our town, but I didn't think we would get to be at the game," Johnson said. "This was awesome… (The crowd) was nuts early, but UConn ran away with it, so it died down."

Even though the price of the tickets per-se was $0, we still have a market.  I wonder how many, if any, students sold their tickets.

As always, HT to Marginal Revolution for the MIE tag.

 

Good Stuff, Maynard

"Good stuff, Maynard."  If you're like me, you've said that phrase many times, but had no idea where it came from.  Thanks to YouTube, now we know.

 

Carlos Silva and Sunk Costs - an Update

In this previous post, I explained why getting rid of Carlos Silva, despite his $11.5 million in salary that the Cubs would have to pay him, was a good decision.  Here is what team owner Tom Ricketts has to say.

"One of the things (Hendry and I) talked about is it doesn't matter what a guy makes when it comes to roster decisions," Ricketts said. "We knew it was a possibility there might not be a spot for him, and that's just the way it is. You have to have the best team on the field. That's what counts."

Silva's contracted salary was a sunk cost - a cost that is unavoidable no matter what decision is made.  Sunk costs should not be considered when making a decision.  Instead, consider those costs which can be avoided.