I like to bring up the principal-agent problem in my sports econ course when discussing the draft. I pose the question: "Does the players association (for ______ league) have the best interest of rookies in mind when negotiating player rights for the draft/rookie contract limits?" Students often take the idea and run with it.
Great example - in NFL, we know Caleb Williams would get $35 million per year (at least) now if not for rookie scale. Vets have incentive to keep rookie pay down given set amount can be spent
I like to bring up the principal-agent problem in my sports econ course when discussing the draft. I pose the question: "Does the players association (for ______ league) have the best interest of rookies in mind when negotiating player rights for the draft/rookie contract limits?" Students often take the idea and run with it.
Great example - in NFL, we know Caleb Williams would get $35 million per year (at least) now if not for rookie scale. Vets have incentive to keep rookie pay down given set amount can be spent