Contract Extensions

Anthony C. Krautmann

Journal of Sports Economics, 2018, vol. 19, issue 3, 299-314

Abstract: This article is concerned with how contract extensions create incentives that affect the characteristics of compensation of Major League Baseball players. We begin with a description of a number of attributes of the negotiation process. Using a sample of contract extensions, we summarize a number of characteristics of this phenomenon. For example, we show how both sides are made better off as a result of these negotiations and that most extensions take place during the last year of the existing contract. Furthermore, for those players with less than 6 years of service, the new contract typically extends beyond the player’s arbitration-eligible years.

Keywords: contract; extensions (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:jospec:v:19:y:2018:i:3:p:299-314

DOI: 10.1177/1527002516656727

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