- StudyBlue
- Michigan
- Michigan State University
- Economics
- Economics 328
- Fisher
- Iss Final Exam
Iss Final Exam
Economics 328 with Fisher at Michigan State University
About this deck
By: Dan Osterman
Created: 2010-12-02
Size: 63 flashcards
Views: 81
Created: 2010-12-02
Size: 63 flashcards
Views: 81
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have used this website for three exams, and I see a huge difference in my test results.”
Naj
Naj
Sign up (free) to study this.
Federal Wire Act
Prohibited gambling over the "wires."
Ex. At the time telephone.
Most all internet gambling sites are outside the US
Professional and Amateur Sports Prediction Act, 1992
Sports gambling only in forms that preexisted;
Sports books in Las Vegas
Sports Lottery in Oregon
ALL OTHER FORMS OF GAMBLING ON SPORTS IS ILLEGAL!!
What forms of gambling are legal in the US?
State lotteries-40 states +DC
Casinos (indian tribal lands:350 in 30 states) (Commercial: 400 in 15 states)
Horse & Dog racing
sports betting=nevada/Oregon
charity events
Hawaii & Utah have no form of gambling
Reasons to limit internet gambling
Hard to regulate
competition w/other forms of gambling
addicting
crime-safety of athletes
Integrity of sports
Consumer interest
Can NCAA Athletes gamble?
NO
NCAA Rules
athletes may not gamble on anything
Not allowed to give out any info to people who may gamble on sports
NCAA gambling/fixing cases
College basketball point shaving, 1954 (CCNY, Kentucky)
Kentucky "death penatly"
ASU, BC, Toledo, NW
Pro Sports & Gambling
Not encouraged
players, officials, & team admin. may not gamble
BUT
Point spreads are widely known
NFL: explicit rules for reporting injuries
What are Point Spreads?
Set by casinos
assisted by private analysis firms
OBJECTIVE: equal amount bet on each option
Not necessarily a forecast of expected outcome
Issues with sports betting?
Casinos can lose
Ex. Super Bowl 2008 (Giants vs Pats)
$92 mill. bet
casinos lost $2.6 mill.
sports betting downside for people?
$$ advantage for casino
YOU pay $1.10 for each dollar bet (10% commission)
WIn; receive $1 bet plus $.10 fee plus $1 winnings
Lose: lose both $1 bet and $.10 fee
Financial Advantage Example
10 sports bets of $10 each
-costs $100 plus $10 fee=$110
Win half of bets "fair game"
-receive $10+$1+10=$21 per win
-total=$105
-Net LOSS=$5
-must win 52.4% (53%) of the time to break even
Financial Advantage Example #2
100, $1 bets
-costs $100+$10=$110
win 53 bets (53%)
-receive $53+$53+$5.30=$111.30
NET GAIN=$1.30
-$111.30-$110
marketing & gambling
advertising by gambling entitles:arenas, broadcasts, sponsorship,..
-Mohegan Sun advertising for Celtics & red sox
-university New Mexico
Ownership by gambling entities
marketing & gambling #2
mohegan suns buys WNBA orlando team & mves to Connecticut( Conn Sun @ Mohegan Sun Arena)
-Marion Illich & motor city casino
Are athletes endorsed by gambling entities?
Yes
ex. Harrahs sponsorship of Robby Gordon
Sports advertising at gambling entities?
yes
Joe Louis & las vegas casinos
mays & mantle, las vegas casinos, 1983
NBA, NHL, AFL licensed logos for sports-theme state lotteries in US and Canada
Clayton Act 1914
specifically exempted labor unions from anti-trust
When did Labor unions reach their peak of importance?
1950's
-over 1/3(36%) of labor was unionized
National Labor Relations Act 1935 (US Congress)
-right of labor to organize & form union
-right to bargain COLLECTIVELY thru representatives of their own choosing
-right to use pressure tactics such as strikes
strikes often ended bloody in flint
now only 12% of labor force is unionized(book error)
Sports Unions
Thrived throughout years
Before 1970, unions played a small role
After 1970, grew with astonishing growth of revenue in all pro sports
What kind of unions are sports unions?
Craft union- descended from medieval guilds (organized along skill lines)
Industrial union-originated in 19th century (organized by industry not skill line)
-ind. revolution lead to ride of large firms
-sought to offset power of large employers
How craft unions affect pay?
some restrict access to skills
some restrict access to jobs
raise pay by shifting labor supply from Snu to Su
How industrial unions affect pay?
-workers act on pay directly
-push up collective bargaining
-negotiations between labor union and an employer to set terms of employment for union members
Sports are a hybrid for what reasons?
players have special skills
do NOT bargain over specific wages of individual players, but pay & other issues common to all players
unions bargain collectively
Bilateral Monopoly
have a monopoly union w/a monopsony industry
monopoly unions vs monopsony (owners)
until 1970, owners dominate players
- Unions weak or non-existent
- Reserve clause binds players in all leagues
- Sports unions begin to rise in power in 1970s
- Replace monopsony with bilateral monopoly
- Monopsony employer tries to lower pay
- Monopoly union tries to increase pay
- Pay increases dramatically in all leagues
Strike
- when workers act together to remove the labor from the production process
Lockout
- when management of the firm does not permit the labor input to operate
How many times more likely is it for a sports strike rather than other industries to strike?
50
Examples of cause of strikes?
- Owners were often divided
- Could not present coherent stance
- Led to uncertainty by players
- Players knew big-city owners wanted to settle
- uncertainty or mistrust
When did players have upper hand in sports unions?
2000
had overthrown the reserve clause
owners have since turned the tide and have reasserted restrictions`
Labor relations in MLB
MLBPA began in 1954
passive organization until marvin miller was hired in 1966
- Instituted arbitration(where an independent 3rd party determines a disputed outcome) in 1974
- Led to the “free agency”
strikes in MLB
- MAJOR STRIKES IN 1981 AND 1994 (The “mother of all strikes” that precluded the 1994 playoffs and World Series plus 15 games in 1995)
- SINCE 1995 RELATIVELY PEACEFUL
Labor relations in NFL
NFLPU formed in 1956
no salary arbitration
Rozelle rule
limited free agency
- Compensation paid to teams gaining free agents(so high that few occurred), named after former NFL Commissioner Pete Rozelle
mcneil vs nfl (1992)
- forced NFL into free agency (4 years); “one franchise player, whom it can reserve”
strikes in NFL
- Only Two Significant Work Stoppages
- 1982 57 day strike
- 1987 24 day strike
- Owners united; Players were not
- Yet, only league with no work stoppages since 1987
- SEVERE SALARY CAP
- Salaries in NFL have lagged badly behind those in baseball and basketball
The final result of the 1940 football game between Cornell and Dartmouth best reflects the theme of which movie ?
- Knute Rockne All-American
According to the most common application of title IX, participation on womens intercollegeiat athletics
null
CHicago white sox in the "black sox" scandal
were tried in court and found innocent
Which of the 4 major league sports have the most fixing in the US?
Basketball
which of gambling activity is legal?
betting on a college football game at a casino in vegas
What is revenue?
- Revenue is team or league income
- Ticket sales
- Broadcasting
- Concessions
- Licensing and advertising
- Gifts
What is Market Value?
How much the team could be sold for.
Depends on revenue, expenses, prospects for future and estimated by forbes
Value added formula?
Income-capitol purchases
Why do sports have a "special status?"
People wanna feel like they belong to a team.
marketing
Examples of revenue sources?
donations
league (national)broadcast
Team(local) broadcast
ticket prices
concessions
advertise
etc.
which pro sports league gets the largest/smallest share of revenue from ticket prices?
largest is MLB
Smallest=NHL
Ticket sales provide about what share of MSU athletics revenue?
30%
profit formula?
profit=revenue-costs
What is Marginal Revenue?(MR)
- additional revenue from the sale of one additional ticket or an additional set of tickets
Formula for (MR) marginal revenue?
MR=change in revenue/change in tickets
What is Marginal Cost? (MC)
- additional costs to produce one additional unit of output
What is the Profit Maximization Rule?
Produce or sell as long as MR>MC
DO teams usually max profit?
Generally no.
MR<0, studies prove it
Why do ticket prices vary?
Different types of seats
diff. of opponents
diff. in consumers
What league has the highest average ticket price and fastest growth rate since 2000?
NFL
What is price discrimination and how many degrees are there?
- 3 degrees
- Auction; each person charged the highest price willing to pay
- “First-degree price discrimination”
- Quantity discounts, based on the idea of declining marginal value
- “Second-degree price discrimination”
- Exploit differences in consumer price sensitivity; type of consumer
- “Third-degree price discrimination”
How do teams generally sell tickets?(primary way)
Through a licensed ticket broker
- ex. Ticketmaster
How are tickets sold thru the secondary ticket market?
Tickets sell @ market value which could be below or above face value
- types of sellers
- online resellers
- ex. stubHub & TicketCity
- game-day resellers
- scalpers
Legal aspect to ticket reselling
- Different states have different ticket resale laws
- Trend toward less regulation
- Many states have no regulation at all
- CA, NY, TX, FL, OH
- Some states prohibit sellers from selling above face value + a small fee (~$2.00)
- NC, MA
What is Asymmetric Information?
- Occurs when one party in a transaction has more or better information than the other party
About this deck
By: Dan Osterman
Created: 2010-12-02
Size: 63 flashcards
Views: 81
Created: 2010-12-02
Size: 63 flashcards
Views: 81
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have used this website for three exams, and I see a huge difference in my test results.”
Naj
Naj