Institutional Change and Factor Movement in Major League Baseball: An Examination of the Coase Theorem’s Invariance Principle

摘要

One version of the Coase Theorem suggests that the distribution of resources is invariant to the assignment of rights. The lack of real world examples has made empirical tests difficult. However, such a ‘rights’ change did occur in Major League Baseball in the 1970s where the ‘rights’ of players were switched from owners to players. We examine whether this change impacted the distribution of players. In the end, the characteristics of player movement do appear to have been impacted by the re-assignment of rights and therefore, calls into question the relevance of this version of the Coase Theorem.