Does Competition Work in Baseball?Mike Rappaport

Russ Roberts says not very well.  Why?

My claim is that baseball, while competitive (in the everyday senseof the word), is not a very good testing ground for the power ofcompetition as economists use the term. The biggest problem with generalizing from baseball to the rest ofthe economy is that if you do a lousy job in baseball, you still make alot of money.

Since 1998, the Kansas City Royals have been horrible.They have won more games than they’ve lost only once in that span. Theother years, they’ve been dreadful. They’ve lost 100 games or more fourtimes since 1998. Yet according to Forbes, the value of the franchise doubled between 1998 and 2005.