Publication Date



Final offer salary arbitration in major league baseball offers a unique institutional arrangement that creates a naturally occurring non-equivalent groups repeated measure research design. The structural arrangements allow for examination of anticipatory expectancy effects and for assessment of behavioral responses consistent with equity theory predictions. Additionally, equity theory can be tested without the methodological problems inherent in defining the referent other. Performance and mobility were examined for major league baseball position players who won and lost their arbitration hearings. Pre-arbitration performance was found to significantly predict arbitration outcome. Despite similar patterns of post-arbitration performance between winners and losers, a significant relationship was noted between losing arbitration and postarbitration performance declines. Analyses also suggested that losers were also significantly more likely to change teams and leave major league baseball. The causality of the relationship between performance and arbitration outcome is discussed along with expectancy and equity effects as they relate to performance and mobility following the arbitration intervention.


Suggested Citation
Bretz, R. D., Jr., & Thomas, S. L. (1991). Perceived equity, motivation and final offer arbitration in major league baseball (CAHRS Working Paper #91-05). Ithaca, NY: Cornell University, School of Industrial and Labor Relations, Center for Advanced Human Resource Studies.