MATCHING AND EFFICIENCY IN THE BASEBALL FREE-AGENT SYSTEM - AN EXPERIMENTAL EXAMINATION

This article presents the results of an experimental study investigati ng the problem of allocating heterogeneous indivisible objects using m arket-like mechanisms. The object of study is the market for professio nal baseball players in their free-agent year. We investigate both the current free-agency system and a variant of the current system instit uted informally by the teams and ruled illegal by arbitrators. We then propose and test a new alternative matching mechanism, which proves t o have quite a few desirable characteristics.