| Abstract: |
In this paper, we are interested in the impact a Major League Baseball (MLB)
manager has on a team’s outcome. Using data on manager’s contracts, team
performance, and team and manager characteristics, first, we determine the
variables that determine a manager's salary. Then, we use a forecasting-type
analysis to study the determinants of a manager’s performance, measured by
winning percentage, attendance or playoff appearances. We find that a
manager's past performance affects his current salary, but his current salary
does not affect the team's performance. Our results support the lack of a
competitive and efficient market for MLB managers. |