Both Lissa and Malcolm Tredinnick pointed me to this, a delightful PBS piece about the economics of decision-making in baseball. Its authors use baseball as a set piece to illustrate the fundamentals of behavioral economics – the notion that the whole idea of perfect markets and rational actors trying to maximize their self-interest is, in reality, a bunch of bunk.
JIM SHERMAN, Psychologist: The idea that if the outcome is good, the decision must have been the right decision. Well that’s not true. Sometimes good outcomes are based on bad decisions and sometimes good decisions lead to bad outcomes.
PAUL SOLMAN: These and other all-too-human tendencies, say Sherman and Thaler, lead to a game replete with irrationality. Such as only using your star relief pitcher in the last inning, and only if your team is ahead.
JIM SHERMAN: The guy who ends the game is called “the closer.” And the guy who pitches before him is called “the setup man.” Now it’s clear which you’d rather be– you’d much rather be the closer than the setup man.
LITTLE LEAGUE COACH: You did a great job, all right? I’m very proud of you.
PAUL SOLMAN: Closers get more fame, more money. But statistically, getting outs in the last inning is no more important than in, say, the inning before.
RICHARD THALER: Every out is important. And it’s no harder to get the last three outs than the previous three outs, and in fact, it can often be the other way.
PAUL SOLMAN: Then there’s another strategy that has become the way to do things: The sacrifice bunt.
RICHARD THALER: The book says in a close game, the first guy gets on, the next guy should try and do a sacrifice bunt to get him over to second base. And the analysis of that shows that you actually score somewhat fewer runs with a man on second and one out, than a man on first and no outs.
PAUL SOLMAN: So even when it advances the runner, the aptly- named “sacrifice” results in a too-costly out. This, in short, is not rational maximizing behavior, any more than an intentional walk is. Even if issued to baseball’s scariest hitter, Barry Bonds.
Pedro and the Rocket, this afternoon at 2 p.m.