Monitoring Cartel Behavior and Stability: Evidence From NCAA Football

Most economists view the National Collegiate Athletic Association (NCAA) as a cartel. We investigate the dynamic strategic interaction among NCAA members in a cartel model with incomplete information focused on the strategic behavior induced by self-monitored enforcement of recruiting rules. Empirical results from a panel Probit model strongly support the predictions of the model. Lagged winning percentage, the discount rate of the decision maker, the institution’s commitment to non-athletic activities, and the institution’s demand-cost configuration, are all important predictors of institutions being placed on probation for violating the cartel rules. JEL Codes: L12, L83, I20 ∗Corresponding author. UMBC, Department of Economics, 1000 Hilltop Circle, Baltimore, MD 21250. Internet: [email protected]. We thank Brian Goff, Bill Shughart, and Andy Zimbalist for their valuable comments. †The author is an economist at the Federal Trade Commission. This paper was written independently of the author’s duties at the FTC and thus expresses solely the views of the author and not those of any Bureau, any individual commissioner or the