Moral Hazard of the Designated Hitter (Part 4 and Final)

A majority of this paper has highlighted a cost associated with the designated hitter rule: moral hazard problem. There exist other costs as well. The designated hitter rule, which ultimately leads to more hit batsmen, could unnecessarily increase the risk of injury.21 With only a little over 60 feet separating a pitcher with a 90 mile-per-hour fastball and the batter at the plate, there exists the potential for tragic results should the pitch make contact with the batter. In addition, there exists potential for a bench-clearing brawl as a form of retribution against the pitcher should the pitch hit the batter.22 These are serious costs.

Some of the costs mentioned, however, have already been addressed by the MLB. The MLB requires all batters wear some type of protective helmet while at bat and that balls be replaced early and often in order to reduce the risk of serious injury.23

While bench-clearing brawls may be dangerous to players, and despite how perverse it may be, fans most likely gain some utility from witnessing such events.24 Many sports fans, especially fans of hockey or football, enjoy watching aggression. Why wouldn’t baseball fans? Further, as previously discussed, the implementation of the double-warning rule has overshadowed the moral hazard created by the designated hitter rule and has resulted in more hit batsmen in both leagues. Clearly, if safety was the first priority, the double-warning rule would be repealed first, reducing the number of hit batsmen in both the AL and the NL.25 Nevertheless, most hit-by-pitch incidents involve minimal or no injury.26

In closing, although statistical data indicates the designated hitter rule creates a moral hazard in the AL, this hazard is somewhat overshadowed by the double-warning rule. If the designated hitter rule were to be eliminated, the moral hazard would not disappear, but be the consequence of another source. In the American League, teams and fans clearly benefit from the increased offense and attendance. This benefit must be compared to the potential of injury to the players, among other costs. Through cost-benefit analysis, baseball fans can see that the marginal benefits of the designated hitter rule exceed the marginal costs of the designated hitter rule, though the costs include moral hazard.