Are Voluntary Agreements Better? Evidence from Baseball Arbitration

John Budd, Aaron Sojourner and Jaewoo Jung ()
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Jaewoo Jung: Korea Labor Institute

No 8098, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper empirically examines the widespread belief that voluntarily negotiated agreements produce better long-run relationships than third-party imposed settlements, such as arbitrator decisions or court judgments. Two key outcomes are analyzed – subsequent player performance and the durability of club-player relationship. Major League Baseball provides a compelling setting for these analyses because individual performance is well measured, there is the possibility of relationship breakdown, and both voluntary and imposed settlements are routinely used. While the results clearly show that a third-party imposed settlement is not better than a voluntary one, the evidence in support of the widespread belief is mixed.

Keywords: salary; negotiation; arbitration; dispute resolution; sports; baseball (search for similar items in EconPapers)
JEL-codes: J52 M12 M5 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2014-04
New Economics Papers: this item is included in nep-spo
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Published - published in: Industrial and Labor Relations Review, 2017, 70 (4), 865 - 893

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