The Effects of Final-Offer Arbitration on the Performance of Major League Baseball Players: A Test of Equity Theory

This study examined potential motivational processes of major league baseball players participating in final-offer arbitration. For baseball players, finaloffer arbitration entails both the player and the team management submitting a nonnegotiable salary figure to an impartial arbitrator. Based on the evidence proferred by the respective parties, the arbitrator adopts either the player's or team's salary figure as the player's compensation for the upcoming season. Using an equity theory perspective, we found support for the prediction that postarbitration player performance was linked to the arbitrator's decision and to the discrepancy between the player's salary request and the team's salary offer. The study's results were discussed in terms of general implications for equity-theory research.