Salary disclosure and individual effort: Evidence from the National Hockey League

James Flynn

Journal of Economic Behavior & Organization, 2022, vol. 202, issue C, 471-497

Abstract: In late January, 1990, the salary of every National Hockey League (NHL) player was suddenly disclosed, ending a decades-long culture of pay secrecy. I find that underpaid players respond to this new information by reallocating effort from defense to offense, which is more highly compensated within the league. Underpaid players begin scoring more, but allow their teams to get scored on by even more than the additional goals they provide. Asymmetrically, overpaid players do not become more defensive-minded. Consistent with reference-dependent utility theory, I find suggestive evidence that this shift is more pronounced for underpaid players who play for teams with higher overall payrolls, as these players likely have a larger discrepancy between their actual salary and their reference point.

JEL-codes: D82 D9 J31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:202:y:2022:i:c:p:471-497

DOI: 10.1016/j.jebo.2022.08.014

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