SPRING 2026

AUTHOR

Vanessa Palisin, Presbyterian College

ABSTRACT

Literature has shown that athletic performance fluctuates across the years of a long-term contract. This variability may be attributed to a range of factors, both uncontrollable – such as injuries, mid-season adjustments, or unforeseen complications – and controllable, like opportunistic behavior.

Players are incentivized to perform at their highest level in pursuit of a long-term, lucrative contract; After this is signed and official, certain players may exhibit a tendency to experience diminished motivational incentives to keep pursuing their all [1]. This phenomenon is commonly referred to as strategic and shirking behavior [3]. Building upon Rosen and Sanderson’s (2001) marginal revenue product model [2], more research is needed to determine whether player compensation accurately reflects player performance over the entire contract cycle.

This study focuses on the National Hockey League (NHL), which Bruggink and Williams (2011) heavily analyzed [3]. Bruggink and Williams found significant increases in offensive contributions just before free agency status. With statistically significant data indicating short-term statistical spikes, the research also found performance often regressed to prior levels once contract deals are solidified.

All in all, this study found that players produced approximately 5.6 fewer production units, representing a statistically significant decline relative to projected trends. Understanding these behavioral patterns is critical for teams and general managers seeking to optimize contract structures, mitigate moral hazard, and align incentives with long-term organizational goals.