The authors’ affiliations are, respectively, Department of Economics, Scripps College, Claremont, CA 91711. E-mail: firstname.lastname@example.org; Department of Accounting, Eller College of Management, University of Arizona.
Home Safe: No-Trade Clauses and Player Salaries in Major League Baseball
Article first published online: 21 JUN 2012
© 2012 Regents of the University of California
Industrial Relations: A Journal of Economy and Society
Volume 51, Issue 3, pages 627–644, July 2012
How to Cite
PEDACE, R. and HALL, C. M. (2012), Home Safe: No-Trade Clauses and Player Salaries in Major League Baseball. Industrial Relations: A Journal of Economy and Society, 51: 627–644. doi: 10.1111/j.1468-232X.2012.00693.x
- Issue published online: 21 JUN 2012
- Article first published online: 21 JUN 2012
In this study, we examine the wage effects of no-trade clauses in Major League Baseball. Using an accepted player salary equation and data from the 2003–2008 seasons, we find evidence that there is a trade-off between monetary compensation and the risk reduction provided by a no-trade clause. The results suggest that players may be able to simultaneously negotiate for a no-trade clause and higher salaries, but this is constrained when players also seek to guarantee their income stream with long-term contracts.