Graduation Year

Spring 2014

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Heather Antecol

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© 2014 Colin Briskman

Abstract

Past work in sports economics has examined evidence of how the incentives created by contract structure influence player performance, specifically looking at two types of behavior. The contract year phenomenon refers to an increase in production in the final year of a player’s contract. The shirking effect refers to a reduction in performance in the early years of long-term contracts. While previous studies have investigated these effects separately, they are interrelated and should be integrated into a common analysis. I begin by testing for evidence of each effect independently, using various performance measures. I then combine my test of these phenomena into a single examination. Separate analysis produces weak evidence of a contract year phenomenon and strong evidence of a shirking effect. However, in the combined analysis, the contract year phenomenon drops out while the shirking effect persists. This suggests that the contract year phenomenon does not exist, and that evidence of it found in some previous studies may actually be due to a failure to incorporate the shirking effect in the analysis.

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