Arbitrator Compromise in Final Offer Arbitration: Evidence from Major League Baseball
Posted: 29 Feb 2008
Abstract
This article presents evidence that the preferred awards of arbitrators in final-offer arbitration (FOA) compromise between the perspectives of the bargainers. Using Major League Baseball FOA offers between 1986-2002, this study finds strong evidence that final offers (which are strategically formulated around the preferred award) are a weighted average of the player`s salary in the previous season and the average free agent salary. The findings are particularly interesting because FOA was created to eliminate arbitrator compromise. (JEL J520, L830)
Suggested Citation: Suggested Citation
Marburger, Daniel R., Arbitrator Compromise in Final Offer Arbitration: Evidence from Major League Baseball. Economic Inquiry, Vol. 42, Issue 1, pp. 60-68, 2004. Available at SSRN: https://ssrn.com/abstract=906206
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