Buy custom The Salary Cap and Major League Baseball
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This model should be accurate because the factors listed play the important roles in the success of a baseball club.
The reason that a salary cap would help increase competitive balance is because it would limit the amount of money a team could spend on their payroll which is an important factor in the production function...
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This model would also force teams to spend more money on players or increases payroll which will lead to more wins for that team. If teams such as the Yankees are limited to spending 80 million on their payroll it would allow some of the great players that the Yankees stockpile to be picked up by other teams...
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