The Bonus: An Analysis of Fund Allocation in the MLB First Year Player Draft
Open Access
Author:
Lunger, Jeffrey
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Ran I Shorrer, Thesis Supervisor Sung Jae Jun, Thesis Honors Advisor
Keywords:
Sport Baseball Draft MLB Economics
Abstract:
How do Major League Baseball teams allocate their signing bonus funds for the Rule IV draft? This thesis answers the question revolving around the effectiveness of four different behavioral decisions that organizations decide upon when selecting and signing their draft picks. By analyzing the frequency of four draft behaviors – signing the first selection above or at/below slot and subsequently second selection above or at/below slot – the regression measures no significant influence that these decisions carry over the success of the draft class. The lack of a clear dominant behavior suggests that the draft selection process is in an equilibrium.
