IDEAS home Printed from https://ideas.repec.org/a/eee/soceco/v89y2020ics2214804319304963.html
   My bibliography  Save this article

Free agency and organizational rankings: A social comparison perspective on signaling theory

Author

Listed:
  • Garcia, Stephen M.
  • Arora, Poonam
  • Reese, Zachary A.
  • Shain, Michael J.

Abstract

Free agency connotes the freedom of an individual to choose whether or not they leave their home organization. We explore how options afforded to the free agent are influenced by the rankings and social comparison concerns between the home organization and outside organization. Probing free agency movement in Major League Baseball (MLB), Study 1 shows that free agents are less likely to move between highly ranked teams than between intermediately ranked teams. Studies 2 and 3 experimentally replicate these effects, showing that highly ranked home teams are more willing to retain their free agents with aggressive counter-offers when the outside offers are from other highly ranked teams, whereas intermediately ranked home teams are less willing to do so when outside offers are from other intermediately ranked teams. Study 3 additionally found that social comparison partially mediated the effect. Implications for free agency and the benefits (and sometimes costs) of having an outside offer are discussed.

Suggested Citation

  • Garcia, Stephen M. & Arora, Poonam & Reese, Zachary A. & Shain, Michael J., 2020. "Free agency and organizational rankings: A social comparison perspective on signaling theory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 89(C).
    • Handle: RePEc:eee:soceco:v:89:y:2020:i:c:s2214804319304963
    DOI: 10.1016/j.socec.2020.101576
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2214804319304963
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.socec.2020.101576?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bhanot, Syon P., 2017. "Rank and response: A field experiment on peer information and water use behavior," Journal of Economic Psychology, Elsevier, vol. 62(C), pages 155-172.
    2. David Gill & Zdenka Kissová & Jaesun Lee & Victoria Prowse, 2019. "First-Place Loving and Last-Place Loathing: How Rank in the Distribution of Performance Affects Effort Provision," Management Science, INFORMS, vol. 65(2), pages 494-507, February.
    3. Arora, Poonam & Peterson, Nicole D. & Krantz, David H. & Hardisty, David J. & Reddy, Kavita S., 2012. "To cooperate or not to cooperate: Using new methodologies and frameworks to understand how affiliation influences cooperation in the present and future," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 842-853.
    4. Garcia, Stephen M. & Tor, Avishalom, 2007. "Rankings, standards, and competition: Task vs. scale comparisons," Organizational Behavior and Human Decision Processes, Elsevier, vol. 102(1), pages 95-108, January.
    5. Paul M. Sommers & Noel Quinton, 1982. "Pay and Performance in Major League Baseball: The Case of the First Family of Free Agents," Journal of Human Resources, University of Wisconsin Press, vol. 17(3), pages 426-436.
    6. Graf, Lorenz & König, Andreas & Enders, Albrecht & Hungenberg, Harald, 2012. "Debiasing competitive irrationality: How managers can be prevented from trading off absolute for relative profit," European Management Journal, Elsevier, vol. 30(4), pages 386-403.
    7. Jonah Berger & Devin Pope, 2011. "Can Losing Lead to Winning?," Management Science, INFORMS, vol. 57(5), pages 817-827, May.
    8. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    9. Poonam Arora & Gwendolyn A. Tedeschi, 2019. "The dark side of competition: Modeling status games," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(7), pages 761-771, October.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Bar-Eli, Michael & Krumer, Alex & Morgulev, Elia, 2020. "Ask not what economics can do for sports - Ask what sports can do for economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 89(C).
    2. Jyh-How Huang & Yu-Chia Hsu, 2021. "A Multidisciplinary Perspective on Publicly Available Sports Data in the Era of Big Data: A Scoping Review of the Literature on Major League Baseball," SAGE Open, , vol. 11(4), pages 21582440211, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Boucher, Michel, 1985. "Coûts de transaction et faible nombre relatif des Canadiens français dans la LNH," L'Actualité Economique, Société Canadienne de Science Economique, vol. 61(3), pages 388-393, septembre.
    2. Lackner, Mario & Weichselbaumer, Michael, 2023. "Can barely winning lead to losing? Gender and past performance," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 258-274.
    3. repec:spo:wpmain:info:hdl:2441/5fhe3c1k6b8mu8jtd19s688u7s is not listed on IDEAS
    4. Dong, Lu & Huang, Lingbo, 2019. "Is there no ‘I’ in team? Strategic effects in multi-battle team competition," Journal of Economic Psychology, Elsevier, vol. 75(PB).
    5. Pablo Casas-Arce & Carolyn Deller & F. Asís Martínez-Jerez & José Manuel Narciso, 2023. "Knowing that you know: incentive effects of relative performance disclosure," Review of Accounting Studies, Springer, vol. 28(1), pages 91-125, March.
    6. repec:hal:spmain:info:hdl:2441/5fhe3c1k6b8mu8jtd19s688u7s is not listed on IDEAS
    7. Ghazala Azmat & Manuel Bagues & Antonio Cabrales & Nagore Iriberri, 2018. "What you don’t know... Can’t hurt you? A natural field experiment on relative performance feedback in higher education," Sciences Po publications info:hdl:2441/5r0qo9lp3v9, Sciences Po.
    8. Azmat, Ghazala & Iriberri, Nagore & Bagues, Manuel, 2016. "What you don't know... Can't hurt you? A field experiment on relative performance feedback in higher education," CEPR Discussion Papers 11201, C.E.P.R. Discussion Papers.
    9. Ghazala Azmat & Manuel Bagues & Antonio Cabrales & Nagore Iriberri, 2016. "What You Don’t Know... Can’t Hurt You? A Field Experiment on Relative Performance," Working Papers 788, Queen Mary University of London, School of Economics and Finance.
    10. Azmat, Ghazala & Bagues, Manuel & Cabrales, Antonio & Iriberri, Nagore, 2016. "What You Don't Know... Can't Hurt You? A Field Experiment on Relative Performance Feedback in Higher Education," IZA Discussion Papers 9853, Institute of Labor Economics (IZA).
    11. Mario Lackner & Michael Weichselbaumer, 2021. "Can barely winning lead to losing? Evidence for a substantial gender gap in psychological momentum," Economics working papers 2021-19, Department of Economics, Johannes Kepler University Linz, Austria.
    12. Miller, Danny & Pastoriza, David & Plante, Jean-François, 2019. "Conditioning competitive risk: Competitors’ rank proximity and relative ability," Journal of Economic Psychology, Elsevier, vol. 73(C), pages 161-175.
    13. Ghazala Azmat & Manuel Bagues & Antonio Cabrales & Nagore Iriberri, 2019. "What you don't know...Can't hurt you? A natural field experiment on relative performance feedback in higher education," Post-Print hal-03574128, HAL.
    14. Ferdinand Thies & Sören Wallbach & Michael Wessel & Markus Besler & Alexander Benlian, 2022. "Initial coin offerings and the cryptocurrency hype - the moderating role of exogenous and endogenous signals," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1691-1705, September.
    15. Anders Gustafsson, 2019. "Busy doing nothing: why politicians implement inefficient policies," Constitutional Political Economy, Springer, vol. 30(3), pages 282-299, September.
    16. Michael Waldman, 1990. "A Signalling Explanation for Seniority Based Promotions and Other Labor Market Puzzles," UCLA Economics Working Papers 599, UCLA Department of Economics.
    17. Stuth, Stefan & Schorlemmer, Julia & Hennig, Marina & Allmendinger, Jutta, 2014. "Freiwilliges Engagement: Ein Patentrezept für Wiedereinsteigerinnen?," Discussion Papers, Presidential Department P 2014-007, WZB Berlin Social Science Center.
    18. Jitender Singh, 2016. "Quality of Public Goods, Public Policy and Human Development: A State-wise Analysis," Indian Journal of Human Development, , vol. 10(2), pages 215-235, August.
    19. Thomas de Haan & Theo Offerman & Randolph Sloof, 2015. "Money Talks? An Experimental Investigation Of Cheap Talk And Burned Money," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(4), pages 1385-1426, November.
    20. Marco Pecoraro, 2014. "Is There Still a Wage Penalty for Being Overeducated But Well-matched in Skills? A Panel Data Analysis of a Swiss Graduate Cohort," LABOUR, CEIS, vol. 28(3), pages 309-337, September.
    21. Josse Delfgaauw & Robert Dur, 2008. "Incentives and Workers' Motivation in the Public Sector," Economic Journal, Royal Economic Society, vol. 118(525), pages 171-191, January.
    22. Douglas Cumming & Lars Hornuf & Moein Karami & Denis Schweizer, 2023. "Disentangling Crowdfunding from Fraudfunding," Journal of Business Ethics, Springer, vol. 182(4), pages 1103-1128, February.

    Corrections

    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:eee:soceco:v:89:y:2020:i:c:s2214804319304963. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620175 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.