Arbitrator bias and self-interest: Lessons from the baseball labor market |
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Authors: | John D Burger Stephen J K Walters |
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Institution: | (1) Loyola College in Maryland, 21210 Baltimore, MD |
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Abstract: | Their desire for enduring employment is commonly assumed to induce arbitrators to make fair awards. We find, however, that
in major league baseball's unique institutional setting, selfinterested behavior by arbitrators has led to bias against players
and preservation of monopsony rents for team owners. We apply a standard model of arbitrator behavior to all 391 arbitrated
cases in baseball since 1979. Under conditions that should lead to an even split in awards to teams and players, probit analysis
indicates that arbitrators favor teams 61 percent of the time. Furthermore, bias against African-American and Latinborn players
is even more pronounced. |
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Keywords: | |
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