Moral Hazard of Designated Hitter (Part 2)

According the Major League Baseball, the designated hitter rule provides as follows: “A hitter may be designated to bat for the starting pitcher and all subsequent pitchers in any game without otherwise affecting the status of the pitcher(s) in the game…” [Appendix A]5 The rule goes on to state, among other things, that the designated hitter rule is not a mandatory one; a team can choose whether or not to adopt it.

After a period where pitchers dominated the game, leading to low-scoring ball games and decreased attendance, the AL implemented the designated hitter rule in 1973 with the goal of increasing offense and attendance by swelling the talent pool of batters in the lineup.67 Traditionally, competing teams field nine players who must both play defense and contribute offensively at the plate. When a team chooses a pitcher, who is responsible for putting the ball in play, they look at their pitching talent and ignore their batting talent. This tends to result in pitchers with relatively poor batting skills because their development has been weighted toward their primacy role. The designated hitter rule allows for a team to replace this ‘weak link’ with a player possessing greater offensive abilities, ultimately increasing the total offensive output.8

Though the rule succeeded at turning the AL into a power league, the success came at a cost. Because they are not required to appear at the plate, AL pitchers can throw at opposing batters with greater impunity than NL pitchers, who must take their turn at the plate, resulting in the AL having more batters hit by pitches than the NL. In other words, NL pitchers must internalize the cost of hitting an opposing batter, by facing the opposing pitcher at the plate; AL pitchers play without direct retaliation. From 1973 to 1993, the AL had 2,526 more hit batters than did the NL, with the AL having, on average, 475 hit batters per season, while the NL tallies in at, on average, 350 batters plunked [Appendix B].910

The results show that AL pitchers became much more willing to throw at batters after the designated hitter rule went into effect, creating a classic moral hazard problem. Pitchers who do not have to bat, where there is the potential for retaliation, are more willing to risk plunking batters than pitchers who do bat.