Mixing the princes and the paupers: Pay and performance in the National Basketball Association

R Simmons and David Berri

No 611523, Working Papers from Lancaster University Management School, Economics Department

Abstract: We investigate how team and individual performances of players in the National Basketball Association respond to variations in intra-team pay inequality. By breaking down team dispersion into conditional and expected components, we find that expected pay dispersion has a positive effect on team and individual performance. We find that team and individual performances are essentially orthogonal to conditional pay inequality, counter to the hypotheses of fairness and cohesion proposed in the literature both for sports and general occupations. A change in collective bargaining regime in 1996 had little impact on either team or player productivity.

Date: 2010
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Journal Article: Mixing the princes and the paupers: Pay and performance in the National Basketball Association (2011)
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