Essays on the behavioral economics of discrimination

To wit, explaining the resistance Beane received initially, and the resistance to the approach among other teams.

Discrimination Within The Criminal Justice System In The Us Essay

I expect the above sounds like unalloyed cheer leading for the efficiency of markets and the rejection of behavioral economics in toto. I do neither. This story, however, the Moneyball story, illustrates what can happen when an imaginative entrepreneur sees what others do not. Beane saw the existence of systematic misperceptions in the market for baseball players, baseballs players being underpriced relative to their true potential, and exploited that misperception to the benefit, if temporarily which also reflects the efficient work of the market , of himself, the otherwise underpriced players, and the fans of the Oakland As.

He served as editor of the Journal of Theoretical Politics from through About the Author. I think that Moneyball makes a basic error. Which may not be as major as I originally thought, given that the effect has been arbitraged away. The basic error is that of the objective function, goal of the baseball-team manager.

Moneyball assumes that the goal is to maximize wins, whereas the actual goal is to maximize revenues. The two goals conflict if the fans are coming to games to see highly-paid sluggers battling it out.

Doctoral thesis

The statistical prescription for winning is to fill a team with players who hit lots of singles and generate lots of walks, which might seem boring to a spectator. So, following the Moneyball strategy might actually reduce attendance and revenues.

Behavioural Economics - Heuristics

Parenthetically, I wonder if the focus on winning with singles and walks has contributed to the issue with slow play that baseball is currently contending with. The point was that my guys made the other team EARN their victory. They executed plays to the best of their ability. And they fought to the end, even long after the outcome was clear. But over time, Fox is tempted by the prospect of career advancement into taking steps to promote victory even at the expense of virtue. For example, he persuades a player to make his tackles harder in order to beat up a rival team.

Fox has a strategy for getting into the NFL, but he fails to implement it, and thus is resigned to his career plateauing—until he is offered a job as an NFL coach based on nothing more than his personal relationship with a rich widow who knows nothing about football. This is another blow to his concept of meritocracy: chance and personal connections, not strategy, are the source of his success. The question arose as to whether there was racism in English soccer teams, and whether they discriminated against black players.

Surprisingly, that can be measured statistically with reasonable certainty. If there WAS discrimination, than a soccer team would hire a white player in preference to an equally talented black player.

As a result, black players would be forced to accept lower salaries to get a job- an inefficiency in the soccer market. Take a multiple regression on black players, team performance, and team salary. Given two teams with the same salary, if the team with more black players performed better, and the differences were statistically significant, THAT would be a sign of discrimination.

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Other teams notice the inefficiency, and by the s the salary discrepancy had disappeared. Your email address will not be published. Notify me of follow-up comments by email. Notify me of new posts by email. This site brings together serious debate, commentary, essays, book reviews, interviews, and educational material in a commitment to the first principles of law in a free society. About Contact Staff. In their review, Thaler and Sunstein argue, Why do professional baseball executives, many of whom have spent their lives in the game, make so many colossal mistakes?

James R. Recent Popular Posts Popular. Comments I think that Moneyball makes a basic error.

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