Superstar Is A Team Economics Essay

Superstar Is A Team Economics Essay Superstar is a team use to describe that the people who got special who is widely known, prominent and successful to dominate the fields in which they engage and superstars normally earning enormous amounts of money. This essay is trying to explain and analysis this phenomenon in the labour market of sports industry. The reason for the superstar phenomenon might cause by many factors. Production in the world of sports, as noted by Neale (1964), is decidedly different from production in most other markets. Argentine professional footballer, Lionel Messi is the worlds highest-paid football player, The talisman of Barcelona, Messi ,earns some 33 million euros ($43.5 million) a year with a 10.5-million-euro salary, 1.5 million euros in bonuses and 21 million euros in advertising and other contracts. (Levine, 1991)This salary might be far more than normal worker. There are many reasons for the super star phenomenon and the labour market of superstar will be analysis in the rest part of th e essay. This essay is aim to use economics model to explain the reason of the high salary for super stars in sport industry. Main body Assume that the labour market is perfect for athletes. Players are all identical. The labour market can be explained by the perfect competition model. In the figure 1, profit maximization requires that the MRP curve cut the MC curve from above. The firm gives up profits if it operates at point a because adding units of labour beyond the intersection adds more to revenue than it adds to costs. Once the firm reaches point b, adding more labour would result in the costs of each unit being higher than the revenue that unit generates. In long-run equilibrium in a perfectly competitive industry in a perfectly competitive industry only normal profits are earned. At that situation employment would be at E1, and the wage at W1, since ARP equal to MC. If above normal profits were being earned by the firms in a perfectly competitive industry average revenue product would be forced down by the entry of new firms. (Figure 1) In labour market of sports industry, monopsonist market means that there are too few of buyers so that the price of labour increases if a team attempts to employ more. (Sandy et al, 2004) Assume all the firms in the league are aim for profit-maximized. The monopoly power of sports clubs makes the question of motives important because the monopolies have much more discretion over pricing and output levels than do competitive companies. A model (Figure 2) is applied to determinate the salary for athletes. Team rosters are usually fixed and it is more sensible to consider the supply of labor in teams in units of quality rather than in the number of players. Even if the rosters were not fixed, if a club already has many players it may not be sensible to add another player of average quality. As superstars are extremely scarce, the supply of labor measure in quality units is not perfectly elastic. To add a unit of player quality the team has to pay a higher price than it paid for its last unit of quality. Marginal factor cost (MFC) is cost of hiring an extra unit of quality. Marginal revenue product (MRP) is additional revenue that the league receives as a result of hiring each additional unit of quality.The wage that tem willing to pay will be located at the intersection of MFC and MRP because marginal cost equal to marginal revenue is the maximum of profit. The profit will be maximized at W1 with L1 unit of player. (Figure 2) In the labour market of sports, athletes with outstanding talent are monopolistic due to scarcity and restrictions on mobility, especially draft system in US. The Agent or players unions also act as monopolists on account of there are very few union and most players are in the same union in each sport. The union helps player to bargain for their salary therefor it act as a single seller in the market. Similar to (Figure 2), the model (Figure 3) for players union determines the wage level for salary at the intersection of MRP and MC, where marginal cost equal to the marginal revenue product. The profit maximized for players union at W2 and L2 unit of player. (Figure 3) Because of the draft system in some sports is more special. For example in US, the teams drafted player from college and buy them. The trade, with only one seller and one buyer involved, has been defined as Bilateral Monopoly. The model of Bilateral Monopoly (Figure 4) is like combination of (Figure 2) and (Figure 3).The W1 stands for Monopoly wage and W2 is Monopsony wage. The salary will be between W1 and W2 depend on the bargain. (Figure 4) In superstar markets, tiny differences in talent at the top of the distribution will translate into large differences in revenue. sellers of higher talent charge only slightly higher prices than those of lower talent, but sell much larger quantities; their greater earnings come overwhelmingly from selling larger quantities than from charging higher prices (Rosen etc. 1981), Just like the (Figure 4).As the talent of player getting close to the top along the curve, little tiny change of talent can cause significant change in the salaryhe reason for this phenomenon is because the special skills are had to copy and it has been defined as productive of the players. (Figure 5) For non-team sports the difference is much easier to find that widely spread prize money. As Non- team sports normally don not have salary, the prize reward monitoring the relationship of the talent and the earning. An example is the prize reward of Wimbledon Tennis Championships, first prize money is 1,150 thousand pounds and the second places prize is 575 thousand pounds, the rest of players only share very little amount of money. (Hogg, 2012)The reason for this is because of the match host trying to have more attraction of latter game and match. The Tournament theory has the same pattern of (Figure 4). The theory used to describe certain situations where wage differences are based not on marginal productivity but instead upon relative differences between the individuals. In the study of labour market of super star, Sherwin Rosen (1981) found that threats of potential entry force the market became equilibrium. Free entry implies that total revenue must be driven down to opportunity cost P2 .Assume the buyer paid at P1.the value excess the P2 is profit and another seller would like to join in the market to share the profit .This behaviour will definitely shift price to P1 and makes profit to zero. (Figure 6) Even professional player are only for one kind of sport, but individual player have different talents they cannot simply shown by (Figure 5).Therefore using (Figure 7) to explain the situation. The superstars can make profit base on their unique talents. There are limitations of distance of competitors and unit rent, but total revenue for superstars still large because of scales economies. There might be a lot of people can do the similar skill but one skill by a professional player is still very special. Since the services produced by more talented sellers are less contaminated by crowding, the quantity-price gradient grows as talent increases. Therefore the better sellers can and do handle much larger players in equilibrium. (Figure 7) Hausman and Leonard (1997) found the presence of stars had a substantial effect on television ratings, even after controlling for team quality. Berri(2004) used data of NBA proved the relationship between the Gate revenue and the star player is significant. As Hausman argued, the star power attracts the fans. The analysis made by Berri (2004) also shows the star player have a strong relationship with number of wins, which also been assume as the performance of the team. A super star is not only benefit the own team which also benefit the competitors. As the product of the sports game is normally Broad casting has become an increasing source for the revenue of most of sports league for the last several decades. In the case of the National Basketball Association, each teams financial situation depends significantly on the revenue it generates through its local television contracts and national television contracts. Television Station are willing to pay high levels of rights fees to NBA games because they can charge high advertising rates to advertisers and because they add incremental subscribers. Advertisers are attracted by sports programming because it provides access sizable numbers of the funs of super stars. The famous case might be the return of Jordans first game, the highest NBA regular season game rating since 1975, generated a rating of 10.9 %.( Hausman et al 1997) For example, Manchester United benefit from the distribution and broadcasting of live football content directly from the revenue. The Manchester United with huge amount of fun around the world helps the c lub with its commercial achievement and utility ( Hogg ,2012) .Since a super star can draw so much attention and increase large amount of revenue .it is no doubt that a club would like to pay such high salary to these professional players. For example, Manchester united generates revenue from multiple sources, including sponsorship, merchandising, product licensing, media and mobile, broadcasting and match day. The super stars effects are not only happen during the matches, but also for the league commercial revenue. The Manchester United is not only a club with super stars .It also trying to combines the power of super stars to build up its own brand. Manchester United sells competitive sports apparel, training and leisure wear and other clothing featuring the Manchester United brand on a global basis. Over 5 million items of Manchester United branded licensed products were sold in the last year, including over 2 million Manchester United jerseys. Manchester United branded products are sold through over 200 licensees in over 130 countries. Super stars earing money when each product with their copy rights. ( Hogg ,2012) Limitation In this article, many situations and factors in the real word has been neglected as it is easier to analysis the labour market. Firstly, there are uncertainties of hire a new player. Secondly, when a team sign the contract with a player in long term, there is no guarantee for the quality of performance. Thirdly, Team work is also important in the real world. Finally, the club is not able to keep observe players future quality and effect. Because of the superstar phenomenon, many experts believe it reduce the competitive balance .Therefore ,some policy and rules has been used to prevent from it ,for instance, Luxury tax ,Salary cap and gate sharing increase the competitive balance. Conclusion The labour market of superstar holds a key position in the analysis of the economics of sport and of professional team sports in particular, as a consequence of monopsonists and monopolists. The situations in sports labour markets are bilateral monopolies with only one buyer and one seller and the wage for player is indeterminate. Super stars with special abilities are scarcity and restrictions on mobility. Professional plays earning far more than others for tiny talent change when the talent level is relatively high. The combination of technology consumption and imperfect substitution leads to sport superstars can own a large market size and income at a same time. Power of super star also attracted fans and consumers to see their matches by live matches or broadcasting. Moreover, club can use the superstars to build up their brand and earing revenue from global basis funs. Even leagues of sports try to increasing the competitive balance of the labour market by using restrictions lik e salary cap; however, it is clear that super stars still deserve the high income and honour after the analysis all above. Reference Bibliography Berri, D. et al (2004) Stars at the Gate: The Impact of Star Power on NBA Gate Revenues. Journal of Sports Economics; vol. 5: pp. 33-50 Berri, D. et al (2006) On the Road With the National Basketball Associations Superstar Externality. Journal of Sports Economics; vol. 7: pp. 347-358 Depken, C.A. (2000), Free Agency and the Competitiveness of Major League Baseball, Review of Industrial Organisation, Vol. 14, pp. 205-17 Frick, B. (2007). The football players labor market: Empirical evidence from the major European leagues. Scottish Journal of Political Economy, 5, 422-446. Hausman, J.A. and Leonard, G.K. (1997) Superstars in the NBA: Economic Value and Policy, Journal of Labour Economics, Vol. 15, No. 4, pp. 586-624 Hogg, T (2012) Statistics and comparisons of annual incomes in the UK, 2010, Journal of Economics, Vol. 5, pp55-78 Kahn, L. and Shah, M. (2005). Race, compensation and contract length in the NBA: 2001-2 Industrial Relations, 44, 444-462. Levine, D.I.(1991) Cohesiveness, Productivity and Wage Dispersion, Journal of Econ. Behaviour and Oragnisations, Vol. 15, pp. 237-54. Porter, P.K. and Scully, G.W. (1982) Measuring Managerial Efficiency: The case of baseball, Southern Economic Journal, Vol. 48, No. 3, pp. 642-50 Rosen, S. (1981) The Economics of Superstars, American Economic Review, issue 5, pp. 845-58 Rottenberg, S. (1956) The Baseball Players Labour Market, Journal of Political Economy, Vol. 64, No. 3, pp. 242-58. Scully, G.W.(1974) Pay and Performance in Major League Baseball, American Economic Review, Vol, 64, No. 6, pp. 915-30 Sandy. R et al. (2004), The Economics of Sport: An International Perspective, Palgrave Macmillan, New York: Toby ,M. et al.2003) The Over-Production of US Sports and the New International Division of Cultural Labor .International Review for the Sociology of Sport. Vol. 38: pp. 427-440 WALLACE, M. (1988) Labor Market Structure and Salary Determination among Professional Basketball Players. Work and Occupations; vol. 15: pp. 294-312

The Role of America at the End of World War II

The role of America at the end of World War II was where the origins of policing the world originate. America had been engaged in a very costly war in terms of dollars as well as lives. But, despite the expense the United States came out of World War II better than any other nation that was involved. The Second World War was a battle between the Allied and Axis Powers. The Allied Powers consisted of the United States, Great Britain, the Soviet Union, China, and France. This war was seen as the fight against Nazi Germany, and therefore resulted in a majority of the battles fought on German and Russian soil. The aftermath left the Soviet Union in bad shape. Close to twenty million Russians had died fighting the war, which accounted for about eight percent of their population. Conversely, none of the fighting was done on American soil, and while the United States suffered in terms of casualties it was nothing compared to the loss Russia had endured. Because the war would not end ! until the Axis Powers fully surrendered to the Allied Powers, the United States was forced to use the first atomic warfare in history. The atom bomb would later serve as America's greatest possession. Stalin, the Premier of the Soviet Union had always distrusted the American and English intentions. Because of Stalin's aggression and attitude pertaining to Soviet influence on Europe, the postwar stance on Russia had turned into a standoff. This became the origin of the Cold War. The Cold War, seen as a battle between communism and capitalism, was â€Å"in reality a more complex struggle over a broad range of ideological, economic, and strategic issues. † (Henretta, 868) Over the next several years the United States would spend more money on military and defense than ever before. Several measures were taken to ensure that the same mistakes at the end of World War I would not be repeated. The first in a series of measures was a postwar conference involving President Truman and the Soviet Foreign Minister, V. M. Molokov, where Truman controlled the entire meeting and basically scolded the Soviet's for not honoring agreements on Poland. Truman â€Å"told the Russians just where the got off and generally bossed the whole meeting. † (Henretta, p. 869) This symbolized America's strong-arm stance against communism and signified the position we would hold throughout the Cold War. The next step in Truman's agenda was to work with Congress to pass the National Security Act of 1947, which was designed to strengthen defense operations. This act created a single Department of Defense, and created the Central Intelligence Agency, or CIA. These two new agencies acted as the first step in atomic warfare management. Continuing to act as police of the world and leader of capitalism, Truman drafted the Marshall Plan. The Marshall Plan, which complemented the Truman Doctrine, â€Å"was a program of large scale economic and military aid to Europe. † (Heretta, p. 71) Considered by some, this was the most â€Å"innovative piece of foreign policy in American History. Where over the next four years the United States contributed over $12 billion to a highly successful recovery effort. † (Heretta, p. 874) The Soviet Union stilled commanded a blockade on highway, rail, and river traffic to West Berlin. As a result, the United States responded by entering into a peacetime military alliance; this being the first time since the American Revolution. The North Atlantic Treaty Organization (NATO) a project costing $1. 3 billion, enabled the basing of all four United States Army divisions into Western Europe. Twelve nations agreed to sign this pact that stated â€Å"an armed attack against one or more of them in Europe or North America shall be considered an attack against them all. † (Henretta, p. 875) Consequently, a few months later, Stalin â€Å"lifted the blockade which had made the city a symbol of resistance to communism. † (Henretta, p. 875) Between the creation of NATO, the National Security Act and CIA, and the Marshall Plan, America was dictating their position with Russia and communism. These measures made it possible for Americans to become more comfortable with the Cold War. While all of these governmental policies were being put into action, Americans were settling back into the ideology of family and free enterprise. The post-war period became one of the most exciting in American history. With the rising economy and feeling of consumerism, Americans were rebounding from their efforts in World War II. Capitalism was on the rise and the â€Å"Apple Pie† portrait of middle class suburban families was shaping the country. America was now the wealthiest country in the world and Americans had â€Å"accumulated savings of $140 billion† in 1945. Over the next two decades the gross national product more than tripled,† (Henretta, p. 904) signifying prosperity. Between 1945 and 1960, the gross national product would grow from $213 billion to more than $500 billion, while real income would rise 25 percent. Included in these figures was the percent of American families owning homes, which grew from 43 percent to over 60 percent in this same time period; this created the suburban explosion. This suburban lifestyle was intended to symbolize the superiority of capitalism over communism and imply that the American way of life would win the Cold War. (Henretta, p. 903) Americans were again beginning to see the capitalist society they fought for, and the confidence level of the country continued to rise throughout the 1960's. The people cannot create a great nation themselves; great leaders must direct them. Besides the three Presidents who led America throughout the end of World War II and through the Cold War, there were many influential voices that helped to shape the views of the public. Among these influential people was a man named George F. Kennan. He was a member of the United States embassy to the Soviet Union and author of the â€Å"long telegram† which was sent to the heads of state in Washington D. C. In his telegram, Kennan described the Soviets as insecure, inferior, and less advanced than Americans. â€Å"As Russia came into contact with the economically advanced West, fear of more competent, more powerful, more highly organized societies,† (Gorn, p. 229) was the general message Kennan was trying to get across. Because he saw the country from the inside Kennan also believed the United Sates should † pursue a policy of firm containment†¦ t every point where the Soviets show signs of encroaching upon the interest of a peaceful and stable world. † (Henretta, p. 870) This opinion and idea of the relationship between the United States and Russia should have been widely accepted by Americans. They backed this idea of aggressive behavior, rather than a passive approach to the Cold War. Conversely, postwar liberal such as Henry Wallace, â€Å"a Progressive Party leader, continued to seek cooperation with the Soviet Union and defended the participation of Communists in their organizations. (Henretta, p. 885) These ideals were quickly silenced. The American majority, being extremely anti-communist, felt relations with the Soviet Union should be harsh and firm. This period introduced American dominance in foreign policy. The ideals of personal freedom and opportunity were the driving forces behind Western philosophy throughout the Cold War. Not only were these principles showcased, they were set as the benchmark of equality for the human race.

Best Places to Write Research Papers

Maybe you’re a college student, who needs complete silence and distraction-free place to have an opportunity to 100% activate the writing skills and creativity to write research papers. Others require chaotic buss of a local cafà © and favourite cappuccino within fingers reach to write another page. So, what are the best places to work on the research paper at? The Beach Kind of a clichà ©, but who hasn’t dreamt about writing the college paper while resting on a beach with a favourite cocktail? Make sure to dive into the writing trance enjoying the crystal clean ocean water! The Library Who doesn’t love this place? OK, wrong question. What other place can be that suitable for the research paper writing? Libraries are a perfect repository of a great assortment of books and other materials. Besides, it’s quiet. Moreover, you can easily tell the person next to you to shut up and that’s right! And finally, libraries are absolutely free. You don’t have to buy anything and there’s always your favourite coffee on hand. Coffee Shop This is a perfect option for the ones who do not care about loud voices and music. They say that well-known J. K. Rowling have produced her first novel of Harry Potter’s story in one of the local cafà ©s, which makes writing in public places possible. This is a good alternative for the students, who work all alone in the silence too much. The Roof Great opportunity to concentrate on a research paper (of course, if you have an easy and safe access to the place!). Make sure to climb up to have a mile-high panorama. For example, a huge building that overlooks your city or the roof of your house is a really cool place to get your ideas together and put the words on to the Word document. The Art Gallery Enjoy marvelous paintings from the baroque to modern epoch or anything else you like in between, and let your thoughts flow in this kingdom of art! Pick the say when there are not many visitors in order to make the process of writing easier and more comfortable. The Park Today a lot of students try to work in the parks. And it’s pretty understandable. The view is nice, wireless internet, the air is fresh†¦Got to the park and work on your assignment! When picking the right place to work on your research paper, remember that coffee shops and the other public places may be full of distractions. Make sure that the surroundings your finally choose meet your requirements and serve as a 100% guarantee that the work will be done on time!

Shakespeare’s Presentation of Antonio in The Merchant of...

Shakespeare’s Presentation of Antonio in The Merchant of Venice Shakespeare’s portrayal of Antonio in ‘The Merchant of Venice’ is decidedly open to interpretation, as his melancholic nature is revealed at the start of the play and foreshadows his later bad luck, but a specific reasoning behind it is never given. For an Elizabethan audience, Antonio provides the perfect Christian protagonist to Shylock’s evil Jewish antagonist, although our modern reception of him is much more diverse and as such provides the audience with a greater sense of suspense concerning his fate, and enigma surrounding his personality. Arguably this was Shakespeare’s intention as Antonio is perceived as being the eponymous†¦show more content†¦Antonio’s agreement to the ‘bond’ with Shylock may be a final attempt to keep Bassanio in his life, in the real world, which to him involves business rather than the fairytale land of Belmont; no such place could be further from Antonio’s reach – he â⠂¬Å"loves the world only for† Venice. He seems intent on playing the wounded victim as his part in the world â€Å"is a sad one†, yet in spite of this morbid self-indulgence the audience feel compassion for him because outwardly he seems to embody all the virtues of a Christian; he is kind and noble towards his friends and clever as he has not â€Å"trusted† all his â€Å"ventures† in â€Å"one bottom†. He appears fair in his business dealings, ambitious and the perfect gentleman; the antithesis of Shylock and supposedly the admirable hero of the play. Shakespeare emphasises the rift between Jews and Christians during the Elizabethan era to good dramatic effect through the relationship between â€Å"noble† Antonio and â€Å"misbeliever† Shylock. In a time when Christianity was seen as the ‘one religion’ and Jews were still loathed and blamed for the death of Christ, the audiences favour would have fallen with Antonio andShow MoreRelatedA Study of Anti-Semitism in The Merchant of Venice Essay1540 Words   |  7 PagesA Study of Anti-Semitism in The Merchant of Venice ‘The Merchant of Venice’ was written by Shakespeare in 1596 and appeals to both audiences of comedy and tragedy. The play features anti-Semitism which is a response to 1500’s Britain as well as other literature of the time. 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