Are voluntary agreements better? Evidence from baseball arbitration

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Abstract

This study empirically examines the widespread belief that voluntarily negotiated agreements produce better long-run relationships than do third-party imposed resolutions, such as arbitrator decisions or court judgments. 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 arbitrator-imposed resolutions routinely occur. Two key outcomes are analyzed: post-resolution player performance and the durability of the club-player relationship. Multivariate analyses of 1,424 salary renegotiations fail to find significant differences in subsequent player performance, but voluntary resolutions are associated with more durable post-resolution club-player relationships.

Original languageEnglish (US)
Pages (from-to)865-893
Number of pages29
JournalIndustrial and Labor Relations Review
Volume70
Issue number4
DOIs
StatePublished - Jan 1 2017

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Keywords

  • Arbitration
  • Dispute resolution

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