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<p>This paper explores the presence of compensating wage differentials in the National Basketball Association. Using data for over 900 unrestricted free agent contracts in the NBA for the 2012-13 through the 2023-24 seasons, empirical results show that players are willing to trade off salary for the ability to sign with a team that had a superior win percentage in the previous regular season. A similar result is found when using pre-season probabilities of winning a championship in place of win percent differentials. Examining the relationship between contract length and salary, results show that players signing longer term contracts generally earned greater salaries, confirming the findings of previous research.</p>

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The Desire to Win: Compensating Wage Differentials in the NBA

  • 期刊论文

  • 发表日期：

    2026年1月13日

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  • Leo Kahane

摘要

This paper explores the presence of compensating wage differentials in the National Basketball Association. Using data for over 900 unrestricted free agent contracts in the NBA for the 2012-13 through the 2023-24 seasons, empirical results show that players are willing to trade off salary for the ability to sign with a team that had a superior win percentage in the previous regular season. A similar result is found when using pre-season probabilities of winning a championship in place of win percent differentials. Examining the relationship between contract length and salary, results show that players signing longer term contracts generally earned greater salaries, confirming the findings of previous research.