"We explore whether free agents in Major League Baseball meet the expectations set forth by newly signed contracts. The value and duration of these contracts are negotiated between the player (and his agent) and the signing team and are based primarily on the player's performance to date, projected future performance, and potential marketing value to the team. We develop two classes of models to explore this problem using a variety of regression- and tree-based machine learning algorithms.

The market model uses player and team data to predict the market value of a player's performance (i.e., average contract salary). The performance model uses the same data to predict wins above replacement as a surrogate for overall player performance. We translate this measure into dollars using position-based conversion factors.

Analysis of these models demonstrates that the performance model more consistently predicts and assesses player value with respect to their free agent contracts. Together, these models can be used to target or avoid free agents (or other players) whose performance-based value differs significantly from their market value. © 2016 Wiley Periodicals, Inc.

Statistical Analysis and Data Mining: The ASA Data Science Journal, 2016"

"This article focuses on the relationship between contract length and compensation in Major League Baseball. Because the best players receive both the highest salaries and the longest contracts, wage regressions that omit length can lead to misleading inferences. Although contract duration is positively related with salaries, the authors find evidence of a negative relationship between contract length and a player's return to performance.

These results indicate some type of trade-off going on in the negotiation process that has not been identified in the previous literature on compensating wage differentials."

"Research on the effects of extrinsic rewards on subsequent levels of intrinsic motivation and performance has produced conflicting results. In the present study, player statistics were obtained on 33 major league baseball free agents for two seasons prior to, and two seasons after, the signing of the contract. Results suggest that the new contract, particularly its substantial pay raise.

caused a decrease in immediate postcontract performance. In addition, there was some evidence that performance output recovered to its precontract level in the second season postcontract. Findings are discussed with respect to previous work on intrinsic to extrinsic motivational shifts and the overjustification effect."

"Under certain conditions, equity and expectancy theories yield opposite predictions. This study examines one such situation. Performance statistics from a sample of 172 Major League Baseball free agents were collected for the 2 years before and 1 year after each player's free agency filing.

Equity theory suggests that performance decrements will occur when players perceive they are undercompensated in their free-agent year. In contrast, expectancy theory suggests that players' performance wilt be superior when they are tip for new contracts. During the 1st year of a free-agent player's new contract, equity theory predicts that his performance will be superior, whereas expectancy theory predicts that it will be lower.

Free agents' performance tended to decline after they signed contracts with new teams. This study suggests that if Major League Baseball teams pay free agents based on free-agent-year performance, they might not be satisfied with the results. ABSTRACT FROM AUTHOR"