IDEAS home Printed from
   My bibliography  Save this article

Equity and arbitration in major league baseball


  • John Fizel

    (Penn State-Erie, USA)

  • Anthony C. Krautmann

    (DePaul University, USA)

  • Lawrence Hadley

    (University of Dayton, USA)


Equity theory argues that workers examine their job performance and salaries relative to workers in comparable situations. If compensation is inequitable, workers may adjust their behavior. We test the hypothesis that an arbitration-eligible player in Major League Baseball is more likely to file for arbitration and|or proceed to an arbitration hearing if he feels he is underpaid relative to his comparison other. Bivariate probit is used to increase efficiency and correct for the sample bias in estimating decision models within the two-step arbitration process. The results indicate that equity is a significant predictor of a player's unilateral decision to file but is an insignificant determinant of going to a hearing because of offsetting responses to equity by player and owner. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • John Fizel & Anthony C. Krautmann & Lawrence Hadley, 2002. "Equity and arbitration in major league baseball," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(7), pages 427-435.
  • Handle: RePEc:wly:mgtdec:v:23:y:2002:i:7:p:427-435
    DOI: 10.1002/mde.1090

    Download full text from publisher

    File URL:
    File Function: Link to full text; subscription required
    Download Restriction: no

    References listed on IDEAS

    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 255-283.
    2. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    3. Phillip A. Miller, 2000. "An Analysis of Final Offers Chosen in Baseball's Arbitration System," Journal of Sports Economics, , vol. 1(1), pages 39-55, February.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. John W. Budd & Aaron Sojourner & Jaewoo Jung, 2017. "Are Voluntary Agreements Better? Evidence from Baseball Arbitration," ILR Review, Cornell University, ILR School, vol. 70(4), pages 865-893, August.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:23:y:2002:i:7:p:427-435. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.