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Economics of Baseball

The Dodgers and Royals dealt with sunk costs. The Rangers must as well.

The Dodgers cut Carl Crawford and the Royals cut Omar Infante despite owing them substantial amounts of money, and successfully avoided the sunk cost fallacy. Will the Rangers do the same with Prince Fielder?

MLB Opening Day payrolls show Royals have surprising salary parity

But so do some other large market teams.

Upton signed a more valuable contract than Davis

On paper, Chris Davis' $161 million contract with the Orioles is much larger than Justin Upton's $132.75 million deal with the Tigers. However, once considering Davis' deferred payments and Upton's buyout, the latter comes out on top.

How is the luxury tax affecting this offseason?

Teams like the Yankees, Dodgers, and Angels have spent little this offseason, perhaps in an effort to avoid paying the luxury tax in future years.

On the value of Carlos Carrasco

If you thought the return for Shelby Miller was high, well you just wait until Carlos Carrasco gets traded.

Nolan Arenado's projected arbitration value is high

Can Nolan Arenado really make over $6.5 million as a super-two? Let's consider the context by using player comparisons.

The Blue Jays' huge attendance boost

Since the trade deadline the Toronto Blue Jays have been playing really good baseball. Attendance at home games has increased along with the team's strong play. Here we examine where this attendance increase ranks historically.

What might a Dallas Keuchel extension be worth?

Dallas Keuchel and the Houston Astros are talking extension. What can past contracts tell us about the payday the big lefty may have in store?

Mike Trout and the greatest contract in baseball

Mike Trout is signed through 2020, and unless something drastic happens, it could prove to be one of the greatest contracts of all time.

Player contracts and investment diversification

By treating player contracts like investments, major league front offices may be able to reduce the risk present in contracts by using the principle of diversification.

Michael Cuddyer vs. draft pick compensation

The Mets lost their 15th overall pick by signing Michael Cuddyer. How well must he perform to offset the cost of future value from that draft pick?

Wins above Prado/Refsnyder/Pirela

In deciding whether to pay Chase Headley a large sum in the free agent market, the Yankees should consider his replacements.

Why haven't the Yankees traded their bonus slots?

At this point, it appears that the Yankees, Red Sox, Rays and Angels have blown past their international amateur signing bonus pools. If they're willing to go that far, why not go a little farther?

Giancarlo Stanton's new contract

Giancarlo Stanton's new contract is the biggest one ever given in sports. Can the Marlins afford it?

Examining the Twins monopoly on the Oceanic market

The Twins have dominated the Oceanic market, but to what return?

Jose Abreu's out clause likely to be exercised

The agent for Yasmany Tomas has said that he expects Tomas to top the $72.5M deal between Rusney Castillo and the Red Sox last month. But it's probably the contract of Jose Abreu to which he should pay more attention.

Few vesting options actually vesting

Sixteen players had the opportunity to affect their chances of vesting a future salary with their 2014 performances; we run down the list.

Why was this trade deadline so crazy?

Economic principles can give us insight into why this MLB trade deadline was such a crazy one. How did the principles of supply and demand create a market for players the likes of which we've never seen?

Valuing Brady Aiken as a free agent

There is a very significant chance that Brady Aiken could become a free agent. Just how much would he be worth in an open market?

The Cubs and Wall Street

How the Cubs front office have employed stock market strategies in their attempts to restock their organization with talent.

Robinson Cano and the Mariners after 70 games

If Cano doesn't hit for power, how does that alter the Mariners' new investment?

The theft of a 255-pound man

Jon Singleton signed a contract extension before making his major league debut, and it looks like the Astros may have gotten a steal.

The value added by positional flexibility

Starting-caliber players who can shift around the field may add value with their versatility. But how, and how much?

How many games would an all-defense team win?

Not all elite defenders are elite players, but a team with the most elite defender at every position would still win a lot of baseball games.

Are the Dodgers targeting pitchers who rake?

In 2013, the Dodgers pitching staff led the majors in wRC+. It looks like the Dodgers have targeted pitchers who rake in free agency and via trade.

Who else needs a contract extension?

The Padres locked up Jedd Gyorko to a contract extension. Extensions like his are becoming more frequent within baseball. Here is a look at some other players that should be considered for extensions.

Attention agents: obtain overuse clauses for RPs

Relief pitchers coming off of heavy use seasons, especially consecutive ones, may have to settle for discounts or shorter-length contracts in free agency. There may be a remedy for that.

The business of baseball: Chicago Cubs

Will the Cubs financial situation get in the way of their plans to renovate Wrigley Field and field a competitive club?

SABR: Who are baseball's most valuable pitchers?

A publication of a response to the SABR Diamond Dollars Case Competition prompt: who are the top three "pitching assets" in the game today?

Trout's extension arrives

Mike Trout, the closet thing we have to a perfect baseball player, has just signed an extension that is both massive and tiny.

Baseball in Australia has staying power

Still young, the Australian Baseball League is starting to catch on -- and it's not going anywhere.

The trade: an analysis

Are trades a dying breed, and were they ever as prevalent as commonly thought?


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