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Multidimensional Separating Equilibria and Moral Hazard: An Empirical Study of National Football League Contract Negotiations

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  • Michael Conlin

    (Syracuse University)

  • Patrick M. Emerson

    (University of Colorado at Denver)

Abstract

This paper empirically tests for a multidimensional separating equilibrium in contract negotiations and tests for evidence of the moral hazard inherent in many contracts. Using contract and performance data on players drafted into the National Football League from 1986 through 1991, we find evidence that players use delay to agreement and incentive clauses to reveal their private information during contract negotiations. In addition, our empirical tests of the moral hazard issue indicate that a player's effort level is influenced by the structure of his contract. © 2003 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Michael Conlin & Patrick M. Emerson, 2003. "Multidimensional Separating Equilibria and Moral Hazard: An Empirical Study of National Football League Contract Negotiations," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 760-765, August.
    • Handle: RePEc:tpr:restat:v:85:y:2003:i:3:p:760-765
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    References listed on IDEAS

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    Cited by:

    1. Jesse Bricker & Andrew Hanson, 2013. "The Impact of Early Commitment on Games Played: Evidence from College Football Recruiting," Southern Economic Journal, John Wiley & Sons, vol. 79(4), pages 971-983, April.
    2. Michael Conlin & Patrick M. Emerson, 2006. "Discrimination in Hiring Versus Retention and Promotion: An Empirical Analysis of Within-Firm Treatment of Players in the NFL," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(1), pages 115-136, April.
    3. Conlin, Michael & Orsini, Joe & Tang, Meng-Chi, 2013. "The effect of an agent’s expertise on National Football League contract structure," Economics Letters, Elsevier, vol. 121(2), pages 275-281.
    4. Steven Salaga & Brian M. Mills & Scott Tainsky, 2020. "Employer-Assigned Workload and Human Capital Deterioration: Evidence From the National Football League," Journal of Sports Economics, , vol. 21(6), pages 628-659, August.
    5. Meng-Chi Tang, 2015. "Contract Length, Expected Surplus, and Specific Investments," Journal of Sports Economics, , vol. 16(3), pages 295-311, April.

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