The Economics Of The Duration Of The Baseball World Series

Abstract

This note examines some statistical features of the major league baseball World Series. We show that, based upon actual historical data, we cannot reject the hypothesis that the two World Series teams are evenly matched. Yet, we can also calculate the relative strengths of the teams that would best match the actual outcomes, and we find that those relative strengths are not equal. Including the home field advantage in the calculations indicates that the differential in relative strength between the competing teams can be explained by this advantage. We present the relative team strengths that would maximize the probability of four, five, six and seven game series. We find that a six or seven game series is most likely when the two teams are evenly matched, a four game series is most likely when the probability of the stronger team winning is one, while the probability of a five game series is maximized if one team has a relative strength of 0 .789. We also show that, on average, the expected number of World Series games will be between 4 and 5.81, depending upon the relative strengths of the teams and the home field advantage. Contracts that do not consider the likelihood of less than seven game Series will create windfall gains to MLB and marginal economic losses to broadcasters.