Baseball Musings
Baseball Musings
January 26, 2005
Replacement Value

Sabernomics is looking for information on calculating the true value of a replacement player. He argues that it should not be league minimum.

Regardless of exact magnitude of the exploitation, certainly we can say the that teams receive more in value from reserved players than the wage they pay out to these players. To acquire a replacement-level player from another team will require compensating the team with reserve rights for the value lost. Therefore, it is incorrect to say that the purchase price of a replacement-level player is equal to the league minimum. Raul Mondesi is not reserved, and therefore does not suffer from the monopsonistic exploitation of a particular team. He is going to receive more compensation for his services than a reserved player. The question is, with the exploitation removed, how much should he be paid for the services (MRP) he will provide? While I don't have an answer, I have some ideas of where to start looking but have not thought it through. I would like to ask readers to lend me your suggestions in the comments section on a way to estimate the actual price of a replacement-level player.

If you have any thoughts, leave a comment on his blog.


Posted by David Pinto at 11:08 AM | Management | TrackBack (0)
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