This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Faurot, D. J. Search for Related Content Social Bookmarking                         What's this?

Equilibrium Explanation of Bargaining and Arbitration in Major League Baseball

University of Kansas

Arbitration in Major League Baseball can be explained by baseball clubs’ lack of information regarding their players’ risk attitudes. Different player risk attitudes yield different contract zones of potential settlements. Profit-maximizing baseball clubs must sacrifice some potential settlements to minimize their expected payments to players. Mixed strategies in arbitration offers by players and settlement offers by clubs yield an equilibrium in a game with asymmetric information. The history of arbitration outcomes is explained by the predicted selection of cases for arbitration.

Journal of Sports Economics, Vol. 2, No. 1, 22-34 (2001)
DOI: 10.1177/152700250100200103


CiteULike    Complore    Connotea    Del.icio.us    Digg    Reddit    Technorati    Twitter    What's this?