This study examines predictions based on the job search model and estimates the overpayment within the labor market in Nippon Professional Baseball using stochastic frontier analysis. The empirical results indicate that more experienced players demand a higher reservation salary, and the effect increases at a decreasing rate. In the overpayment analysis, it is found that international players receive preferential labor market treatment. Moreover, from the analysis of team-level overpayments, payment wastage in terms of a team’s overpayment in a resource-abundant team within a large market (e.g., the Tokyo Giants) results in that team not being the most successful.
AignerD.LovellC.SchmidtP. (1977). Formulation and estimation of stochastic frontier models. Journal of Econometrics, 6, 21–67.
2.
BarrosC. P.Garcia-del-BarrioP. (2008). Efficiency measurement of the English football premier league with a random frontier model. Economic Modelling, 25, 994–1002.
3.
BarrosC. P.LeachS. (2006). Analysing the performance of the English F. A. premier league with an econometric frontier model. Journal of Sports Economics, 7, 391–407.
4.
BatteseG. E.CoelliT. (1992). Frontier production functions, technical efficiency and panel data with application to paddy fanners in India. Journal of Productivity Analysis, 3, 153–169.
5.
BatteseG. E.CorraG. S. (1977). Estimation of a production frontier model: With application to the pastoral zone of Eastern Australia. Australian Journal of Agricultural Economics, 21, 169–179.
6.
BeckerG. S. (1957). The economics of discrimination. Chicago, IL: Chicago Press.
7.
BorlandJ.LyeJ. (1996). Matching and mobility in the market for Australian Rules football coaches?. Industrial and Labor Relations Review, 50, 143–158.
8.
BurdettK.MortensenD. T. (1998). Wage differentials, employer size, and unemployment. International Economic Review, 39, 257–273.
9.
CarmichaelF.ThomasD. (1995). Production and efficiency in team sports: An investigation of rugby league football. Applied Economics, 27, 859–869.
10.
CarmichaelF.ThomasD.WardR. (2000). Team performance: the case of english premiership football. Managerial and Decision Economics, 21, 31–45.
11.
DawsonP.DobsonS.GerrardB. (2000a). Estimating coaching efficiency in professional team sports: Evidence from English association football. Scottish Journal of Political Economy, 47, 399–421.
12.
DawsonP.DobsonS.GerrardB. (2000b). Stochastic frontiers and the temporal structure of managerial efficiency in English soccer. Journal of Sports Economics, 1, 341–362.
13.
EschkerE.PerezS.SieglerM. (2004). The NBA and the influx of international basketball players. Applied Economics, 36, 1009–1020.
14.
Espita-EscuerM.Garcia-CebrianL. (2004). Measuring the efficiency of Spanish first-division soccer teams. Journal of Sports Economics, 5, 329–346.
15.
HadleyL.PoitrasM.RuggieroJ.KnowlesS. (2000). Performance evaluation of National Football League teams. Managerial and Decision Economics, 21, 63–70.
16.
HadleyL.RuggieroJ. (2006). Final-offer arbitration in major league baseball: A nonparametric analysis. Annals of Operations Research, 145, 201–209.
17.
HaasD. J. (2003). Technical efficiency in the major league soccer. Journal of Sports Economics, 4, 203–215.
18.
HoflerR. A.MurphyK. J. (1994). Estimating reservation wages of employed workers using a stochastic frontier. Southern Economic Journal, 60, 961–976.
19.
HoflerR. A.PayneJ. E. (2006). Efficiency in the national basketball association: A stochastic frontier approach with panel data. Managerial and Decision Economics, 27, 279–285.
20.
JamesB.HenzlerJ. (2002). Win shares. Morton Grove, IL: Stats.
21.
JaneW. J. (2010). Raising salary or redistributing it: A panel analysis of major league baseball. Economics Letters, 107, 297–299.
22.
JewellR. T.MolinaD. J. (2004). Productive efficiency and salary dispersion: The case of US major league baseball. Scottish Journal of Political Economy, 51, 127–142.
23.
KahaneL. (2005). Production efficiency and discrimination hiring practices in the national hockey league: A stochastic frontier approach. Review of Industrial Organization, 27, 47–71.
24.
KahnL. (1993). Managerial quality, team success, and individual player performance in major league baseball. Industrial and Labor Relations Review, 46, 531–547.
25.
KumbhakarS. C.Knox LovellC. A. (2000). Stochastic frontier analysis. Cambridge, MA: Cambridge University Press.
26.
LippmanS. M.McCallJ. (1976). Studies in the economics of search. Amsterdam, The Netherlands: North-Holland.
27.
MeeusenW.van den BroeckJ. (1977). Efficiency estimation from Cobb-Douglas production functions with composed error. International Economic Review, 18, 435–444.
28.
MincerJ. (1974). Schooling, experience and earnings. New York, NY: Columbia University Press.
29.
MortensenD. T. (1988). Equilibrium wage distributions: A synthesis. Center for mathematical studies in economics and management science. Discussion Paper No. 811, Northwestern University.
30.
PedaceR. (2008). Earnings, performance, and nationality discrimination in a highly competitive labor market: An analysis of the English Professional Soccer League. Journal of Sports Economics, 9, 115–140.
31.
PorterP.ScullyG. (1982). Measuring managerial efficiency: The case of baseball. Southern Economic Journal, 48, 642–650.
32.
RottenbergS. (1956). The baseball player’s labor-market. Journal of Political Economy, 64, 242–258.
33.
ScottF.LongJ.SomppiK. (1985). Salary vs marginal revenue product under monopsony and competition: The case of professional basketball. Atlantic Economic Journal, 13, 50–59.
34.
ScullyG. W. (1974). Pay and performance in major league baseball. American Economic Review, 64, 915–930.
35.
StevensM. (2004). Wage-Tenure contracts in a frictional labour market: Firms strategies for recruitment and retention. Review of Economic Studies, 71, 535–551.
36.
WebbR. M.WatsonD.HinksT. (2003). Testing for wage overpayment in UK financial services: A stochastic frontier approach. Service Industries Journal, 23, 123–136.
37.
WilsonD. P.YingY. H. (2003). Nationality preferences for labor in the international football industry. Applied Economics, 35, 1551–1559.
38.
ZakT.HuangC.SiegfriedJ. (1979). Production efficiency: The case of professional basketball. Journal of Business, 52, 379–392.
