Sport business……
“We examine bargaining for long-term contracts
in baseball, which usually involves agents negotiating on behalf of
players. We show that when an agent represents a large portfolio of
clients, the agent’s interests may diverge from those of the client.”
.
“Such agents face less risk than their clients and therefore may
calculate a minimum-acceptable contract offer that exceeds that of their
clients.”
.
“Using a sample of
nearly 500 eligible players, we test for the presence of this
principal–agent problem and find evidence that the size of an agent’s
client portfolio negatively affects the probability of successfully
negotiating a long-term contract.”
.
“The results have important
implications for both players and team management as they shed light on
the circumstances under which incentive compatibility may be
compromised.”
.
A.Krautmann, et al
Should Players Trust Their Agents? Portfolio Size and Agency Behavior in Major League Baseball
Journal Of Sport Management — Volume 32 #3 — May 2018 — page 199