The Effectiveness of Incentive Mechanisms in Major League Baseball
AbstractPast work on principal-agent problems in sports does not effectively compare among players. The comparison must be made between players nearing contract negotiations and other players to detect ex ante strategic behavior (turning up performance just prior to contract negotiations) and ex post shirking (slacking off after signing the contract). The authors' productivity measures include statistics reflecting both the player's desire (or availability) to play as well as his performance once he enters a game. The data reject strategic performance. This suggests that mechanisms aimed at curbing strategic performance by players appear to be working well. However, pitchers with nagging injuries may be more likely to be placed on the disabled list while under long-term contracts. This may imply strategic behavior or, conversely, that clubs are choosing to protect an investment. A performance measure used to test for shirking affects some results but not the ultimate conclusions.
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Bibliographic InfoArticle provided by in its journal Journal of Sports Economics.
Volume (Year): 3 (2002)
Issue (Month): 3 (August)
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Find related papers by JEL classification:
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
- J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
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- Jahn K. Hakes & Chad Turner, 2008. "Long-Term Contracts in Major League Baseball," Working Papers 0831, International Association of Sports Economists & North American Association of Sports Economists.
- D Berri & R Simmons, 2007. "Race and the evaluation of signal callers in the national football league," Working Papers 591147, Lancaster University Management School, Economics Department.
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