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Negotiated Settlement Under Mlb Final-Offer Salary Arbitration System

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  • J. RICHARD HILL
  • NICHOLAS A. JOLLY

Abstract

type="main" xml:lang="en"> This paper provides a detailed analysis of negotiated salaries under Major League Baseball's final-offer arbitration process using data from the 2007–2010 seasons. There is a wage premium of 25% for hitters and 14% for pitchers filing for arbitration. Interestingly, there is an additional premium for exchanging offers for hitters but not for pitchers. The additional premium in salary for hitters who exchange offers with their clubs amounts to 7%. (JEL J31, J52)

Suggested Citation

  • J. Richard Hill & Nicholas A. Jolly, 2014. "Negotiated Settlement Under Mlb Final-Offer Salary Arbitration System," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 533-543, April.
    • Handle: RePEc:bla:coecpo:v:32:y:2014:i:2:p:533-543
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    File URL: http://hdl.handle.net/10.1111/coep.12048
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    References listed on IDEAS

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    1. Phillip A. Miller, 2000. "A Theoretical and Empirical Comparison of Free Agent and Arbitration‐Eligible Salaries Negotiated in Major League Baseball," Southern Economic Journal, John Wiley & Sons, vol. 67(1), pages 87-104, July.
    2. Paul L. Burgess & Daniel R. Marburger, 1993. "Do Negotiated and Arbitrated Salaries Differ under Final-Offer Arbitration?," ILR Review, Cornell University, ILR School, vol. 46(3), pages 548-559, April.
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    4. Daniel R. Marburger, 2004. "Arbitrator Compromise in Final Offer Arbitration: Evidence from Major League Baseball," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 60-68, January.
    5. Daniel R. Marburger & Paul L. Burgess, 2004. "Can Prior Offers and Arbitration Outcomes Be Used to Predict the Winners of Subsequent Final-Offer Arbitration Cases?," Southern Economic Journal, John Wiley & Sons, vol. 71(1), pages 93-102, July.
    6. Henry S. Farber, 1980. "An Analysis of Final-Offer Arbitration," Journal of Conflict Resolution, Peace Science Society (International), vol. 24(4), pages 683-705, December.
    7. Orley Ashenfelter & Gordon B. Dahl, 2003. "Strategic Bargaining Behavior, Self-Serving Biases, and the Role of Expert Agents An Empirical Study of Final-Offer Arbitration," Working Papers 857, Princeton University, Department of Economics, Industrial Relations Section..
    8. David J. Faurot & Stephen McAllister, 1992. "Salary Arbitration and Pre-Arbitration Negotiation in Major League Baseball," ILR Review, Cornell University, ILR School, vol. 45(4), pages 697-710, July.
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    Cited by:

    1. James Richard Hill & Nicholas A. Jolly, 2017. "Revenue Sharing and Player Salaries in Major League Baseball," Journal of Sports Economics, , vol. 18(8), pages 831-849, December.

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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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