The Combines Act :: essays research papers

The Combines ActJ.C.H. Joness article "The Economics of the National Hockey League" (1969) subroutine is to explain through simple micro economics that the prime motive ofprofessional hockey team owners is profit maximization. The owners argue thattheir main interest is "for the get along of the game," not the financial benefits ofowning a professional sports franchise and to avoid government regulations suchas the Combines Act (note 1).An article written in 1982 by J.A. Schofield entitle "The Development of FirstClass Cricket in England," states the behavior of sport cartels. Threehypothesises are used to explain the behavior described by Schofield, lean two macrocosm developed by J.C.H. Jones (1969). (1) The profit maximization hypothesis.(2)The joint profit maximization hypothesis that the entire cartel ( unify)strives for. This hypothesis does not co-ordinated non profit objectives thatinfluence group behavior. (3) The utility maximization model that each(prenominal)ow for manypossibilities usually compromising arguments such as the success of the team ata given year and paid attendance for the teams venue.By explaining the frame work of a professional sports league Jones introduces usto factors that make an organized league function, which seems quite familiar toany other monopolistic markets. Since no team can create any revenue bythemselves they must form a coalition with another club to produce a profitgenerating output, namely a hockey game. Other clubs enter this coalition thuscreating a lump league which we call the National Hockey League. Jones thenstates how revenue is generated in the N.H.L and how it is affected by certainfactors.A theoretical model of the N.H.L is created by Jones with all things being equal,creating an equilibrium amongst all clubs. The model is then adjusted to reallife variables that turns his theoretical model into what we know as the N.H.L.Jones variables includes the incentive for teams to win (this being the StanelyCup), different quality of players, the amateur draft (a draft at the end of theseason which amateur players a selected, last place team gets first roll and soforth), and player redistribution(trades).By applying microtheory Jones clearly presents his argument which I was able tounderstand with my current knowledge of microeconomics. Jones examines therevenue side of an individual team use the usual variables tastes, prices,incomes, quality and substitutes. On the supply side Jones stresses that themajor element is the human inputs namely the hockey players. The data that Jonesused was team statistics such as their final rank at the end of the season andthe paid attendance as a percentage of maximum seating capacity.