Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The relevance of sunk costs in decision making is one of the major sources of disagreement between neoclassical economists and behavioral economists. We test the importance of sunk costs by examining the role of a player's draft position on his playing time in the National Basketball Association. Specifically, we ask whether players taken as "lottery picks" or in the first round of the draft are treated differently from otherwise identical players who are chosen later. We build on previous studies in three ways. First, we study a time period that had a stronger contrast between the financial commitment to first and second-round draft picks. Second, we use a better measure of playing time by accounting fully for the time a player loses to injury, suspension, or other exogenous factor. Finally and most importantly, we use a more sophisticated methodology -regression discontinuity -to test for whether teams treat lottery picks or first-round picks differently from later picks. Our results find little or no impact of draft round or lottery status on playing time. Hence, our findings strongly support the neoclassical outlook.
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NON-TECHNICAL SUMMARYWe test whether people respond to sunk costs by asking whether NBA teams give more playing time to "lottery picks" and first-round picks -players to whom they have made a greater financial commitment -than to otherwise identical players who were selected later in the draft.JEL Classification: D03, J23, L83
The Spanish Monarchy pursued a rational policy of price discrimination among its Castilian currencies while financing its early-seventeenth-century wars. Large-denomination gold and silver coins circulated internationally, forcing the Monarchy to act more competitively and not seek additional short-run revenue. In contrast, petty coinage was a local monopoly. The Monarchy raised seigniorage rates and issued large quantities, generating large revenues. The nominal petty money stock grew rapidly, then fluctuated. The real petty money stock grew, then varied little as petty currency depreciation dampened nominal changes.
National Basketball Association (NBA) teams have drafted international players regularly since 1996. Did NBA teams value international prospects accurately relative to U.S. players? Regressions of NBA performance reveal that international players drafted through 2001 tended to outperform expectations adjusted for draft positions. Teams subsequently drafted more international players, but first-round picks tended to underperform, implying that teams overreacted in adjusting their valuations of international prospects. Teams have not moved smoothly toward optimal evaluation of international players relative to U.S.-trained players.
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