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ABSTRACT:
Arbitrators Thomas Roberts and George Nicolau recently ruled that major league baseball team owners colluded against players following the 1985 and 1986 seasons. These decisions provided the motivation to compare ballplayers who signed contracts before and after November 1985. The data set upon which this study is based includes 572 players for the 1987 season with at least one year of major league service. The data were divided into two groups, 236 pitchers and 336 non-pitchers. Each group was then divided into players who signed contracts before and after November 1985. If owners colluded against players who signed contracts after November 1985, then one would expect to find a change in the salary structure of baseball. A regression analysis on performance and experience variables indeed shows a statistically significant structural change in the model of salary determination for both pitchers and non-pitchers before and after November 1985.
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