Shirking on the Court: Testing for the Incentive Effects of Guaranteed Pay

Abstract

Prior work on long‐term contracts and the incentive to shirk has focused almost exclusively on Major League Baseball. The current inquiry is the first to examine shirking in the National Basketball Association. We employed two different measures of player productivity. When the NBA's measure is used, we find evidence consistent with allegations of shirking behavior. But when productivity is measured in a fashion more consistent with economists' definition of marginal product, the evidence of shirking evaporates. (JEL J41, J44, L83)

Shirking in Major League Baseball Revisited

“…We then introduce a new approach to analyzing shirking: One that is based on a comparison of a player's expected to realized marginal revenue product (MRP). Consistent with the results reported in Berri and Krautmann (2006), we find that tests for shirking are sensitive to the approach one uses in the analysis. When testing for opportunistic behavior using performance, we find no evidence of shirking.…”

Mixing the princes and the paupers: Pay and performance in the National Basketball Association

“…Hence, it is possible that increased teammate productivity will lead to reduced individual productivity in basketball. Berri and Krautmann (2006) offer evidence, albeit with marginal significance, that such a negative effect exists in basketball.…”

“…Second, we abstract from dynamic concerns emanating from use of multi-period contracts. These dynamic concerns could include shirking behavior immediately after signing a long-term contract (Berri and Krautmann, 2006). The previous model ignored intertemporal allocations of effort over a long contract period.…”

Is it really all about money? A study on incentives in elite team sports

“…Such indicators include batting and slugging averages, home runs, or hits in baseball (Ahlstrom, Si, & Kennelly, 1999;Harder, 1991;Krautmann & Solow, 2009;Ou & Wang, 2009;Sommers, 1994); goals, assists, and fouls in football (Frey, Schaffner, Schmidt, & Torgler, 2013;Schmidt, Torgler, & Frey, 2009); and points, rebounds, and steals in basketball (Berri & Krautmann, 2006;Stiroh, 2007). Most elite leagues gather these objective statistical numbers, so data sets are available.…”