Recall the Application about the free-agent market for professional baseball pitchers to answer the following question(s).
-Recall the Application. Baseball players who switch teams are more likely to suffer from injuries because the player's ________ team has superior information concerning the health of the player and, if they believe the player will be prone to injury in the future, they ________ be willing to outbid another team.
A) new; will not
B) old; will not
C) new; will
D) old; will

Question

Quizplus · Accepted Answer

The correct answer is B) old; will not. This is because the old team has had more time and opportunity to assess the health and performance of the player. If they believe the player is likely to suffer from injuries, they may not see the value in outbidding another team for the player's contract, reflecting an information asymmetry where the old team knows more about the player's health than the new team.

Recall the Application About the Free-Agent Market for Professional Baseball