The National Basketball Association (NBA) uses labor agreements between players and owners to control player salaries. In the absence of a collective bargaining agreement regarding salaries, the market equilibrium would generate very high salaries for a small number of superstar players. Labor agreements are approved by majority rule, and as in other voting environments, the winning proposals reflect the preferences of the median voter, defined in this case as the player with the median salary. To predict the outcome of a vote between two competing labor agreements, we can ask, Which agreement does the median player prefer?

Recent NBA agreements use salary caps and other provisions to shift salary money away from the superstars in favor of less super players, including the median player. For the 1997 agreement, all players with salaries below the median salary gained from the agreement, and the largest gains went to players with salaries closest to the median salary.

Question.

What is the median-voter rule?

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