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Home Safe: No‐Trade Clauses and Player Salaries in Major League Baseball
Author(s) -
PEDACE ROBERTO,
HALL CURTIS M.
Publication year - 2012
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/j.1468-232x.2012.00693.x
Subject(s) - league , salary , negotiation , economics , wage , compensation (psychology) , labour economics , business , political science , law , market economy , psychology , physics , astronomy , psychoanalysis
In this study, we examine the wage effects of no‐trade clauses in Major League Baseball. Using an accepted player salary equation and data from the 2003–2008 seasons, we find evidence that there is a trade‐off between monetary compensation and the risk reduction provided by a no‐trade clause. The results suggest that players may be able to simultaneously negotiate for a no‐trade clause and higher salaries, but this is constrained when players also seek to guarantee their income stream with long‐term contracts.