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Friday, August 10, 2007

The cartel is doing fine, thank you very much

The NCAA may provide some public-good type benefits but it nevertheless meets many of the textbook qualifications of a cartel: it controls a primary input market (athletes), it controls the primary output market (sporting events and championships), it has a monitoring mechanism (thousands of potential whistleblowers and a full time staff of investigators), and it has a punishment mechanism (probation, post-season bans, scholarship reductions, and potentially the "death penalty").

The NCAA cartel has now explicitly limited new members to its most competitive division. From today's Chronicle of Higher Education:

NCAA Closes Door to Division I, Keeps Proposed Ban on Text Messaging

The NCAA's Division I, with 331 institutional members, is getting too big, its Board of Directors decided today. At the athletic association's summer presidential committee meetings, the board imposed a four-year moratorium, effective immediately, on new applications to the NCAA's most competitive division. The 20 institutions with pending applications will be allowed to continue that process as the division reviews its standards for membership. Also during the four-year period, colleges will not be able to move subdivisions within Division I.

Here is the original NCAA story - happy reading.

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