Performance related pay is a solution to an incentive problem that is optimal when inputs are unobservable and employees lack incentives to provide effort; it also makes pay contingent on luck (Bertrand and Mullainathan (2001)). This paper uses wage payments by professional English football clubs and bookmaker betting odds to test whether player pay is contingent on luck. The results suggest that luck plays no role in determining player wages. This is consistent with the commonsense view that player inputs are largely observable or motivated by career concerns, avoiding the need for performance related pay.
