Monitoring and Employee Shirking: Evidence From MLB Umpires

Abstract

Neoclassical principal–agent theory predicts stricter monitoring should reduce employee shirking; however, recent analyses indicate social aspects of principal–agent relationships may result in “crowding out” of disciplinary effects. Asymmetric implementation of an automated pitch-tracking system in baseball allows for the comparison of monitored and unmonitored umpires to identify shirking in light of incentives. Estimates identify some reduced shirking with monitoring; however, overall, umpires appeared to be quite sensitive to league directives absent technological monitoring. Extreme sensitivity to MLB mandates when unmonitored by the new technology indicates that preexisting monitoring (which included human oversight and efficiency wages) was effective at limiting shirking.