PERCEIVED EQUITY, MOTIVATION, AND FINAL-OFFER ARBITRATION IN MAJOR-LEAGUE BASEBALL

Final-offer salary arbitration in major league baseball offers a unique institutional arrangement that creates a naturally occurring, non-equivalent-groups, repeated measures research design. The structural arrangements allow for examination of anticipatory expectancy effects and assessment of behavioral responses consistent with equity theory predictions. In addition, equity theory can be tested without the methodological problems inherent in defining the referent other. Performance and mobility were examined for major league baseball position players who won and lost their arbitration hearings. Prearbitration performance significantly predicted arbitration outcome. A significant relationship was noted between losing arbitration and postarbitration performance decline. Losers were significantly more likely to change teams and leave major league baseball.