Source: EconLog
by Jon Murphy
“[T]he New England Patriots, my hometown football team, is in desperate need of a good quarterback. I, a 35-year old man, would love to play for the Patriots. In fact, they could offer me the league minimum wage ($795k) and I would instantly quit my job and go play for the Patriots. Millions of other New Englanders (and Americans, for that matter) would also take the Patriots up on that offer. Why, then, did the Patriots offer 21-year old rookie Drake Maye from UNC almost $60 million ($36 million over 4 years plus $24 million signing bonus)? The answer is obvious: He and I are not the same by a long shot. No one would reasonably expect our wages to equalize (mine rise and his to fall). The [ Factor Equalization Theorem] doesn’t hold in this case.” (10/03/24)