I've Solved the Deficit

[Kuciwalker]

For a purely positional good the government could levy a tax arbitrarily close to 100% with no deadweight loss.

[Al B. Sure!]

And why do you think athletic services are a 'positional good'?

[Kuciwalker]

[Kuciwalker]

It's positional because one player's increase in value is largely cannibalized from other players' value. If scientists cloned some sort of super-Tiger Woods, he would get most of the original's incomes without increasing the actual entertainment value of golf (ha!) very much.

[Al B. Sure!]

It's positional because one player's increase in value is largely cannibalized from other players' value.

Explain this further, especially in the context of the New York Yankees

What about the rising popularity of certain sports during certain periods? As the talent level of NFL players has increased so has its popularity, for example.

[Kuciwalker]

I've filled my quota of posts on inexcusably boring sports for the month.

[Al B. Sure!]

I'm also not clear on why that means taxing the players would be appropriate. Wouldn't taxing the teams make more sense since they are the ones benefiting directly from the 'actual entertainment value' of the sport, with the players benefiting tangentally?

[Kuciwalker]

There are actually two distinct but interrelated positional markets, and so you'd want to the tax incidence to fall on both.

[Al B. Sure!]

There are actually two distinct but interrelated positional markets, and so you'd want to the tax incidence to fall on both.

I'm not really buying that a 'super Tiger Woods' would have a marginally small effect on the entertainment value of golf.

We have seen examples where NBA viewership, ticket sales, merchandising, etc. skyrocketed during the days of Jordan then plummeted since his retirement. Granted, other factors may have been at work but I don't think it coincidental that, for example, the NFL has grown significantly in popularity as players have racked up better statistics and broken records since the early 90's... I don't know how major league baseball has changed in popularity but the steroid-fueled home-run hitting craze with Sammy Sosa and Mark McGwire seemed to result in an uptick in the sport's popularity, though I don't know any figures to corroborate that.

[Al B. Sure!]

http://en.wikipedia.org/wiki/National_Basketball_Association_Nielsen_ratings

Once Larry Bird and Magic Johnson retired, the NBA's ratings sank, at least for one year. The 1990 NBA Finals, (which was played before either Bird or Johnson retired) which registered a 12.3 rating (and was the last Finals CBS aired) was the lone NBA Finals between the domination of Bird and Magic and the domination of then up-and-coming star Michael Jordan. In 1991, NBC's first year with the NBA, the network got its dream matchup. Jordan's Bulls finally broke through, after several years of being dominated by the Detroit Pistons, and made it to the Finals. Jordan and the Bulls played Magic Johnson and the Lakers, who were making what was to be their last appearance in the NBA Finals for the next nine years. The hype for the star-studded series was robust, and the ratings were the highest since 1987, when the Celtics and Lakers played for the final time.

The retirement of Michael Jordan set in motion the decline in NBA ratings which continues today.

Regular season NBA ratings on network TV since 1996[2]
Net. Year Rating
NBC 1996 5.0
NBC 1997 4.7
NBC 1998 4.6
NBC 1999 4.3
NBC 2000 3.3
NBC 2001 3.0
NBC 2002 N/A
ABC 2003 2.6
ABC 2004 2.4
ABC 2005 2.2
ABC 2006 2.2

[Kuciwalker]

Jordan was far and away better than everyone else, though. Moreover, you can't really expect economics to make perfect predictions about the effects of specific individuals (note my super-tiger is just illustrative, not a formal argument). And I don't at all claim that increased performance doesn't make sports more enjoyable at all - just that there is definitely a positional effect. One way of looking at that effect is as "free" government tax revenue that can replace taxes with higher deadweight costs; another way of looking at it is akin to an externality, which you would correct with a Pigovian tax.

[Al B. Sure!]

Yet you aren't telling me how it's positional. You're assuming it is, saying it is definitely so, and blabbering about taxing it. Why is it positional?

I need to go to bed but I'll check what you write in the morning.

[Kuciwalker]

Yet you aren't telling me how it's positional.

yes, yes I did, and moreover it's blatantly obvious because professional sports are constructed as a ranked system!

[KrazyHorse]

You forgot the even bigger deficiency that it's one of the most positional markets that exists. (As far as I can tell, this should justify a fairly steep tax on athletes' incomes.)

No, Kuci

A purely positional good is simply an example of a peculiar pair of supply and demand curves

The fact that superstar athletes can capture a large fraction of the surplus available from watching professional sports is no deficiency, as far as I can tell

EDIT: better explanation

[KrazyHorse]

Oh, and albie is a moron