Foundations of Business Strategy | Online Course Support

Several soccer (football) teams are vying for a valuable forward. They all know her stats (amazing!), previous earnings ($110K/year), and medical history (no major injuries). Additionally, each team has a strong defense, but needs a strong forward to drive their offense. One team finally wins the bidding war with an offer of $250K/year. Why is it likely that the highest bidder paid more to acquire this player, terrific though she is, than her actual value?


The market is perfectly competitive since all stakeholders have similar knowledge, which drives up the contract price to higher levels than the value this one player can generate.

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