A shirking model of NBA players.

Abstract

As guaranteed National Basketball Association (NBA) contract salary amounts continuously increase there is a strong possibility of shirking due to difficulty in modeling contracts based upon future performance. Based on a 5-year panel of 121 NBA players this paper uses two stage least squares regression to test the possibility of player shirking by comparing performance in the final year of their contract versus other years. The analysis does not find evidence of shirking, although it does find evidence that player performance is significantly affected by individual characteristics, such as age, experience, and salary. The general conclusion of the study is that competitiveness in the market for NBA players is the primary determinant of player performance rather than attempts by players to consciously affect contract outcomes by selectively altering their performance.