Tournament Incentives, League Policy, and NBA Team Performance Revisited

Price, Joseph; Soebbing, Brian P.; Berri, David J.; Humphreys, Brad R.

doi:10.1177/1527002510363103

Cited by 50 publications

(69 citation statements)

References 20 publications

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“…Whether a team maximizes wins or profits, it should give the greatest playing time to its most productive players regardless of how they were acquired. (For interesting takes on why a rational team might not want to play its best players, see Taylor andTrogdon, 2002 andPrice, Soebbing, Berri andHumphries, 2010). However, sports commentators constantly report that teams are committed to specific players because they had used high draft choices or paid high prices to obtain them, a classic application of the commitment effect.…”

Section: Imentioning

confidence: 99%

Are Sunk Costs Irrelevant? Evidence From Playing Time in the National Basketball Association

Leeds

Motomura

2015

Economic Inquiry

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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. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S 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

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Section: Imentioning

confidence: 99%

Are Sunk Costs Irrelevant? Evidence From Playing Time in the National Basketball Association

Leeds

Motomura

2015

Economic Inquiry

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“…The tanking problem is discussed in all the major US/Canadian sports, with it anecdotally being at its most acute in the NBA, which (quoting from Lenten (2015)): "...introduced a 'lottery' system the top pick is drawn randomly, with probabilities weighted progressively towards lower-ranked teams in 1984 (the NHL,..., followed suit in 2007), weakening the negative correlation between final rank and pick order." The lottery probability structure has been changed a few times since, see Price et al (2010). Despite perennial accusations of NBA teams tanking, we cannot find a single case of a team being charged as such.…”

Section: Salary Caps and Player Draftsmentioning

confidence: 93%

When sports rules go awry

Kendall

Lenten

2017

European Journal of Operational Research

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Mike Wright (Wright, M. OR analysis of sporting rules -A survey. European Journal of Operational Research, 232(1):1-8, 2014 ) recently presented a survey of sporting rules from an Operational Research (OR) perspective. He surveyed 21 sports, which consider the rules of sports and tournaments and whether changes have led to unintended consequences. The paper concludes: "Overall, it would seem that this is just a taster and there may be plenty more such studies to come". In this paper we present one such study. This is an interdisciplinary paper, which cuts across economics, sport and operational research (OR). We recognize that the paper could have been published in any of these disciplines but for the sake of continuity with the paper that motivated this study, we wanted to publish this paper in an OR journal. We look at specific examples where the rules of sports have led to unforeseen and/or unwanted consequences. We hope that the paper will be especially useful to sports administrators, helping them to review what has not previously worked and also encouraging them to engage with the scientific community when considering making changes.We believe that this is the first time that such a comprehensive review of sporting rules, which have led to unexpected consequences, has been published in the scientific literature.

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“…We used a probability analysis to investigate how the incentives to end up last or at a lower rank differed between EDs. This method was also used by Price et al (2010), based on the work of Penrice (1995) and Florke and Ecker (2003) for the NBA's EDs. Figure 2 describes the unconditional probabilities of every NHL team to get the first pick, depending on the format of the ED and the team's rank.…”

Section: The Entry Drafts' Different Losing Incentivesmentioning

confidence: 99%

“…Their results showed that in the presence of losing incentives, teams were more likely to lose. Price et al (2010) used a fixed effect rather then a random effect regression and a larger data set to replicate the findings. Their results also showed that agents lost more when losing incentives were present.…”

Section: Introduction and Related Literaturementioning

confidence: 99%

Incentives to lose revisited: The NHL and its tournament incentives

Fornwagner

2019

Journal of Economic Psychology

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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. The most recent version of all working papers can be downloaded at http://eeecon.uibk.ac.at/wopec/ For a list of recent papers see the backpages of this paper. Terms of use: Documents in Incentives to lose revisitedThe NHL and its tournament incentives Helena Fornwagner * † April 24, 2017Abstract This paper analyzes data from a tournament, namely the National Hockey League regular scheduled season of games, which provides incentives to increase effort in order to reach the playoffs and incentives to decrease effort once a team has been eliminated from playoff considerations because of the entry draft. Our results show that teams indeed react to these dual incentives -they win more games when there is still a chance to reach the playoffs and lose more after being eliminated from playoff considerations. One can argue that losing more games after having no more chance to reach the playoffs could be the result of lower motivation or disappointment. This is the first study to show that this is not the only explanation for a higher amount of lost games. Instead, we find that there is a concrete strategy behind losing.JEL-Classification: C93, D03, L83, M52

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Tournament Incentives, League Policy, and NBA Team Performance Revisited

Cited by 50 publications

References 20 publications

Are Sunk Costs Irrelevant? Evidence From Playing Time in the National Basketball Association

Are Sunk Costs Irrelevant? Evidence From Playing Time in the National Basketball Association

When sports rules go awry

Incentives to lose revisited: The NHL and its tournament incentives

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