Friday, 21 October 2011: 4:35 PM
Professional baseball players, during their first six years on a 40-man major league roster, are denied free agency. That is, a single team posesses an exclusive right to employ the player. Since the right is only temporary, theory predicts that the resource will be used inefficiency. In particular, teams will have the incentive to over-use the resource. Using a panel of data on starting pitchers, we test the hypothesis that, all else equal, players ineligible for free agency will pitch more innings.