SCORE TO WIN BIG

By Ashley Nissenbaum

About the Authors

David J Berri, PhD Associate Professor in the Department of Economics Economics of Sports

Stacey L Brooke, PhD Associate professor in the Department of Economics Behavior of sports leagues and decision making in

professional sports Martin Schmidt, PhD

Associate professor in the Department of Economics Macroeconomics and economics of sports

Instrumental Rationality

Douglass North (1994) “…Informational feedback process and

arbitraging actors will correct initially incorrect models…”

Abundance of information in sports and failure results in loss of revenues So why not follow instrumental

rationality???

Straying from Instrumental Rationality

Moneyball On Base Percentage was undervalued by

decision makers “Go For It”

NFL coaches acted conservative while going for it on the 4th down

Draft Position in the NBA Slow to adapt to new information

Lessons Learned

Lesson 1 Points scored dominates the evaluation of player

productivity in the NBA Lesson 2

Player productivity on the court creates team wins Lesson 3

Team wins drive team revenue Lesson 4

Team Payroll is not highly correlated with team wins Lesson 5

Player performance is relatively consistent across time Lesson 6

NBA efficiency is not about efficiency

Examining the All Rookie Team 3 variables

Player Performance (NBA efficiency , Wins Produced and Points Scored)

Draft Position Number of Games Played

Examining the All-Rookie Team

Collection of Player Statistics

Elasticity of Voting Points

Points scored has the largest impact on voting points

A Test of Free Agents

Data from 255 players with multiyear contracts

Dependent variable – average real salary over contract life

Considered a number of non-performance factors: Injury (captured in number of games

played) Market size Player position Experience

Estimated Coefficients

Entire Vector of Player Statistics