NEGOTIATED SETTLEMENT UNDER MLB FINAL‐OFFER SALARY ARBITRATION SYSTEM |
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| Authors: | J RICHARD HILL NICHOLAS A JOLLY |
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| Institution: | 1. Hill: Department of Economics, Central Michigan University, Mount Pleasant, MI 48859. Phone 989‐774‐3706, Fax 989‐774‐2040, E‐mail hill1jr@cmich.edu;2. Jolly: Department of Economics, Marquette University, PO Box 1881, Milwaukee, WI 53201‐1881. Phone 414‐288‐7576, Fax 414‐288‐5757, E‐mail nicholas.jolly@ marquette.edu |
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| Abstract: | 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) |
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