Essays on the National Football League Rookie Labor Market: Evaluating Behavioral Phenomena Using Quasi-Experimental Techniques

The National Football League (NFL) rookie labor market provides a unique opportunity to empirically examine economic relationships. I exploit a unique market structure, the NFL Draft, to examine the presence of behavioral phenomena in labor markets. The use of the NFL Draft allows the empirical results to be estimated using advanced quasi-experimental techniques.;The first chapter examines the role of dominated information in decision making. The rounds of the NFL Draft are simply groupings of players based on their selection numbers. NFL teams are allowed, and it is common, to trade selections. Therefore, the rounds are not an indication of the number of selections by each team. If a player's selection number is known the rounds provide no additional information. Hence, the rounds should not affect rookie player compensation. Using a sharp regression discontinuity design (RDD) I show the rounds have a major impact on compensation. The first to second round discontinuity is ;The second chapter uses the established round effects on compensation to identify the sunk-cost fallacy in labor allocation decisions by teams. Compensation, specifically salary cap value, represents a sunk cost to teams as it is determined prior to a season and remains constant throughout a season. Therefore, compensation should have no effect on teams' labor allocation decisions, the number of games each player starts. I estimate an instrumental variables selection bias correction model and an instrumental variables zero-inflated negative binomial model. Both estimations show the effect of compensation on the number of games started to be unit elastic.;The third chapter evaluates the effect of compensation on rookie production. I first create a production measure that can be compared across positions using the rates of return to position specific statistics for all players in the NFL. Using the NFL Draft rounds as instrumental variables the effect of compensation on the production measure is estimated. The effect of a 15% increase in compensation is an additional 156 passing yards for quarterbacks. The effect is small; however the NFL market has strong incentives for rookies to exert maximum effort.