Bidding for Ballplayers: A Research Note

Abstract

Is Japanese baseball a different sport from American baseball? In this short research note, we take a new approach to the question Robert Whiting posed so famously three decades ago. Reasoning that owners bid for players who offer fans the sport they want to see, we ask whether Japanese owners bid for players with a different mix of performance attributes than the players for whom American owners bid. We couple pay data (both a player’s salary and his aggregate tax liability) with performance records, and find that Japanese and American owners bid for similar athletes. Apparently, Japanese and American fans want to see similar performances. We also use our data to explore several other discrete questions. We find (a) that the stars earning endorsement income are similar to but younger than those earning the highest team salaries, (b) that (consistent with popular impressions) Japanese teams pay a premium for American players, (c) that white American players do not earn higher salaries than black players, and (d) that the mandatory nine-year contracts in Japanese baseball do not necessarily operate to a player’s disadvantage.