What Is Right With Scully Estimates of a Player’s Marginal Revenue Product

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Krautmann contends that Scully’s method for estimating the marginal revenue products of baseball players using team revenues is flawed. Krautmann suggests an alternate method that uses free-agent salaries to impute players' revenue contributions. The Scully method has its weaknesses; however, its flaws are not as serious as Krautmann claims. Though Krautmann’s free market returns method offers a useful approach for estimating players' marginal revenue products, it suffers from deficiencies that the Scully method avoids; thus, it is not necessarily superior to revenue-based estimates.