Heterogeneous Worker Ability and Team-Based Production: Evidence from Major League Baseball, 1920-2009
Paper No' CEPDP1015:
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Keywords: skill dispersion; baseball; firm performance
JEL Classification: L23; L25; L83; M51
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This Paper is published under the following series:
CEP Discussion Papers
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A detailed longitudinal dataset is assembled containing annual performance and biographical
data for every player over the entire history of professional major league baseball. The data
are then aggregated to the team level for the period 1920-2009 in order to test whether teams
built on a more even distribution of observed talent perform better than those teams with a
mixture of highly able and less able players. The dependent variable used in the regressions is
the percentage of games a team wins each season. We find that conditioning on average
player ability, dispersion of both batting and pitching talent displays an optimal degree of
inequality, in that teams with too high or too low a spread in player ability perform worse
than teams with a more balanced distribution of offensive and defensive talent. These
findings have potentially important applications both inside and outside of the sporting world.