This paper seeks to determine the financial costs of recent injuries and market expectations of players’ future attrition rates by investigating the impacts on free agent contract designs, as represented by the yearly salary and contract length. The empirical findings, derived from data about 698 free agent contracts in Major League Baseball between 2011 and 2018, indicate that injuries exert different impacts on salaries versus contract lengths. For example, free agents who recently injured an elbow or shoulder receive shorter contracts than those not injured in the previous season, but...Read more
