Introduction

In sports, especially baseball, there is a lot of talk about contract year performance.  Beginning in spring training and continuing throughout the season, sports journalists and fans converse about how players in the last year of their contract will perform. Experts in the media, often ex-baseball players themselves, speculate contract year players will have break-out seasons in order to secure a better contract in upcoming contract negotiations.  This leads to the question: do baseball players increase their effort and performance during their contract year to increase the value of their next contract?