In the age before free agency, the labor of Major League Baseball (MLB) players was the property of their team owners. The owners had complete control of whether to trade their players away or keep them on the roster. In the period of free agency, players have the right to sell their services to the highest-bidding team. The Coase theorem predicted that:

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The Coase theorem predicts that in the absence of transaction costs, the distribution of resources (in this case, player talent) will be the same regardless of the initial assignment of property rights (in this case, the ownership of players' labor). In other words, players' talent would flow to where it is most valued, regardless of whether they are owned by a team or able to sell their services freely as free agents. Therefore, the distribution of players' talent in MLB would not be affected by free agency.

In the Age Before Free Agency, the Labor of Major