2019 Student Research Conference:
32nd Annual Student Research Conference

Analyzing the Free Agency System of Major League Baseball


Nicholas Thiele
Dr. David Gillette, Faculty Mentor

In Major League Baseball, a team owns the rights to a player for six years after drafting them.  After these six years the player is eligible for free agency. How does this free agency system affect a player’s value? Economic analysis of this dichotomy of a monopsony transitioning into a monopoly suggests that each system would produce inefficiencies.  Using salary and statistics data from Baseball Reference I compiled all the data from the 2018 season. These data shed some light on the free agency system and its potential inefficiencies, as well as specific statistics that are under or overvalued. Additionally, this model sheds light on who the most and least valued players are and whether the most valuable player was correctly awarded.

Keywords: Major League Baseball, Statistics, Baseball Reference, monopsony, monopoly, free agency

Topic(s):Economics
Mathematics
Statistics

Presentation Type: Oral Paper

Session: 203-5
Location: BH 212
Time: 11:15

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