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NEGOTIATED SETTLEMENT UNDER MLB FINAL‐OFFER SALARY ARBITRATION SYSTEM
Author(s) -
HILL J. RICHARD,
JOLLY NICHOLAS A.
Publication year - 2014
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/coep.12048
Subject(s) - salary , arbitration , settlement (finance) , league , wage , business , economics , labour economics , finance , payment , physics , astronomy , political science , law , market economy
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)