Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Wednesday, December 15, 2004

The NHL: Updating My Priors

After watching the NHL's response (free registration required) to the offer from the players last night, and after listening to the reply by the head of the NHLPA, it sure looks as if the NHL owners are eventually going to get what they want. Off Wing Opinion has an excellent collection of links to up-to-date developments. [Incidentally, the same blog has a fascinating series of postings on the D.C. baseball stadium. ]

Essentially the owners are saying, "We want a hard salary cap, and if we don't get one, what are your options?" The players are saying, "We don't want a salary cap, and we don't care about our lack of options."

Sure, some players can play for a lot less in Europe or in the AHL. And if there's no NHL season, might a different (new) league emerge in the future, made up of many current NHL players? Perhaps, but what are the odds the players could earn as much in a new league as they can in the NHL, even with a salary cap? And what are the odds the players will eventually realize that playing in the NHL with a salary cap is far more lucrative than any other option? And how long will that take?

In my earlier posts, (e.g. here and here), I figured the lockout would be resolved by the end of December. Now I'm very skeptical. Bettman's public stance looked very testosterone-laden, making it difficult for the NHLPA to back down. After all, these are hockey players....

Update: For more information on Bayesian priors, click here.
Another Update: See Tom Luongo's blog for some addition thoughts on the lockout.
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