Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

The Causes of Bargaining Failure: Evidence from Major League Baseball

Amy Farmer, Paul Pecorino and Victor Stango
The Journal of Law & Economics
Vol. 47, No. 2 (October 2004), pp. 543-568
DOI: 10.1086/422981
Stable URL: http://www.jstor.org/stable/10.1086/422981
Page Count: 26
  • Read Online (Free)
  • Download ($14.00)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
The Causes of Bargaining Failure: Evidence from Major League Baseball
Preview not available

Abstract

Abstract Final‐offer arbitration in Major League Baseball provides an ideal setting for examining the empirical regularities that are associated with bargaining failure, since final offers, salaries, and player statistics, which provide the fundamental facts for the case, are all readily available. Using data for players eligible for arbitration for 1990–93, we conduct a wide variety of empirical tests regarding the relationship between aggressive offers and arbitration outcomes. We find that aggressive offers by players trigger arbitration and that more aggressive offers are associated with inferior financial outcomes in arbitration. Overall, clubs appear to outperform players in arbitration. Unexpectedly high or low offers are less common for players who have previously been through arbitration, which suggests that learning occurs. Our results are inconsistent with simple one‐sided asymmetric‐information models of arbitration. The results are more consistent with an optimism model or a model in which some players are risk loving.

Page Thumbnails

  • Thumbnail: Page 
1
    1
  • Thumbnail: Page 
2
    2
  • Thumbnail: Page 
3
    3
  • Thumbnail: Page 
4
    4
  • Thumbnail: Page 
5
    5
  • Thumbnail: Page 
6
    6
  • Thumbnail: Page 
7
    7
  • Thumbnail: Page 
8
    8
  • Thumbnail: Page 
9
    9
  • Thumbnail: Page 
10
    10
  • Thumbnail: Page 
11
    11
  • Thumbnail: Page 
12
    12
  • Thumbnail: Page 
13
    13
  • Thumbnail: Page 
14
    14
  • Thumbnail: Page 
15
    15
  • Thumbnail: Page 
16
    16
  • Thumbnail: Page 
17
    17
  • Thumbnail: Page 
18
    18
  • Thumbnail: Page 
19
    19
  • Thumbnail: Page 
20
    20
  • Thumbnail: Page 
21
    21
  • Thumbnail: Page 
22
    22
  • Thumbnail: Page 
23
    23
  • Thumbnail: Page 
24
    24
  • Thumbnail: Page 
25
    25
  • Thumbnail: Page 
26
    26