Sunday, January 19, 2014

MMA Monopsonist and Labor Supply

Bleacher Report has a great article on the business of MMA and has a link to Eddie Alvarez's contract.  Given that MMA does not have a "players" union, we see some similar labor market behavior to the time period in other professional sports before collective bargaining.  This is an example of a monopsonist facing a competitive labor supply market, where the profit maximizing solution is to set the wage in the competitive labor supply market below what would occur in a competitive labor market.

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