Sunk Costs in the NBA: Why Draft Order Affects Playing Time and Survival in Professional Basketball

Staw, Barry M.; Hoang, Ha

doi:10.2307/2393794

Cited by 334 publications

(282 citation statements)

References 17 publications

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“…After controlling for every variable's fixed effects, draft ranking had a negative influence on player's playing time in the third season: a rookie selected early in the draft had more playing time in the third season regardless of performance. Unlike in Staw and Hoang (1995), who detected a sunk cost effect from the first to the fifth season, this study's results reflect the KBL's lack of human resource infrastructure, as well as the league's relatively short history and potential manpower shortage. According to the Korea Basketball Association (2014), there are 411 student athletes in 34 elementary schools, 443 student athletes in 35 middle schools, 390 student athletes in 30 high schools, and 287 student athletes in 17 universities in Korea.…”

Section: Discussioncontrasting

confidence: 75%

“…Ten individual records (PPG, FG%, RPG, OFF, DEF, APG, SPG, 3P%, BPG, and FT%) were selected to create an index for players' performance. These records accurately reflected the players' productivity and performance (Staw and Hoang 1995).…”

Section: Variablesmentioning

confidence: 93%

“…Departing from Staw and Hoang (1995), we excluded PPG from the players' performance because it is the most important variable for predicting the following season's playing time. Therefore, nine individual records were analyzed in an exploratory factor analysis without PPG.…”

Section: Variablesmentioning

confidence: 99%

“…Overall, draft ranking was a significant variable in explaining the level of playing time for the 1 st and 3 rd seasons, even after considering any effects of players position and performance. Staw and Hoang (1995) claim that the sunk cost effect in the National Basketball Association (NBA) was discovered from the second season to the fifth. However, it appeared only in the third season in the KBL.…”

Section: Jpes ®mentioning

confidence: 99%

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Untitled

2015

JPES

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Abstract:This study examines the sunk cost effect, an irrational behavior, by using Korea professional basketball players' performance records and playing time. Data covering 2001 to 2010 were collected from diverse statistical records from the Korean Basketball League (KBL) website. An initial sample of 187 KBL rookies was collected; 115 samples were ultimately retained after 72 without official records or who retired within three years were removed. The results based on ordinary least squares regressions showed that, first, prior point per game, prior toughness, and prior accuracy were significant predictors of playing time in the second season. Second, prior point per game was a significant predictor of playing time in the third season. Third, the sunk cost effect was statistically discovered in the third season.

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Section: Discussioncontrasting

confidence: 75%

Section: Variablesmentioning

confidence: 93%

Section: Variablesmentioning

confidence: 99%

Section: Jpes ®mentioning

confidence: 99%

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2015

JPES

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“…Escalation of commitment occurs when decision makers continue to commit resources to a project after receiving negative feedback about the effects of prior resource commitments (see Staw [1997] for a review). The finding that decision makers escalate commitment to failing courses of action is robust across many settings and conditions, including capital investment situations.…”

Section: Introductionmentioning

confidence: 99%

Real Options and Escalation of Commitment: A Behavioral Analysis of Capital Investment Decisions

Denison

2009

The Accounting Review

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This study uses experimental methods to expiore whether incorporating reai options into net present value analysis can reduce escalation of commitment, or the tendency of decision makers to continue to commit resources to a project after receiving negative feedback. This reduction in escalation behavior should occur because the incorporation of real options offers the user greater cognitive accessibility to the possibility of project abandonment. Findings indicate that users of real options exhibit less escalation of commitment than do users of net present value analysis alone. The main result demonstrates that the use of real options in capital budgeting can affect the behavior and decisions of the user even in an experimental setting that controls for the informational advantage of using real options.

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Judgment and Decision Making

Connolly¹,

Ordóñez²

2003

Handbook of Psychology

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Judgment and decision‐making (JDM) research embraces a broad interdisciplinary array of topics concerned with human choice. It includes both descriptive studies, aimed at understanding what real decision makers actually do and normative (or prescriptive) work, aimed at advising people how they might make better choices. Core processes include making inferences about what is currently happening, making predictions about what might happen next, and developing preferences about these possible future states. A variety of choice processes have been identified by which these elements can be brought together in selection of preferred actions, either at a single point in time or as a series of interventions over time. Though most research attention has considered individual decision makers, there is also important work in two‐person (negotiation, bargaining) processes and in multiperson decisions made in groups. Across these many topics there is recurrent disparity between what people are seen to be doing and what some putatively normative model suggests they should be doing, suggesting that either model or behavior is in error. This tension, and the obvious applicability of the resolution to important practical decisions, has kept the field highly energized for several decades. The creative furor continues.

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Sunk Costs in the NBA: Why Draft Order Affects Playing Time and Survival in Professional Basketball

Cited by 334 publications

References 17 publications

Untitled

Untitled

Real Options and Escalation of Commitment: A Behavioral Analysis of Capital Investment Decisions

Judgment and Decision Making

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