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