{"id":2924,"date":"2018-08-06T10:30:10","date_gmt":"2018-08-06T05:00:10","guid":{"rendered":"http:\/\/atuljha.com\/blog\/?p=2924"},"modified":"2018-08-06T10:30:10","modified_gmt":"2018-08-06T05:00:10","slug":"thaler-nfl-and-decision-making","status":"publish","type":"post","link":"https:\/\/atuljha.com\/blog\/2018\/08\/06\/thaler-nfl-and-decision-making\/","title":{"rendered":"Thaler, NFL and Decision making"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Richard Thaler is a Nobel laureate and author of the best selling book: Misbehaving. He is a popular figure in the area of behavioral economics.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Last week when I was reading \u2018Misbehaving\u2019- the chapter on decision making caught my attention. It talks about how traditional ways of picking NFL players were resulting in losses. The chapter was from one of Thaler\u2019s popular research papers [<\/span><a href=\"http:\/\/www.nber.org\/papers\/w11270.pdf\"><span style=\"font-weight: 400;\">1<\/span><\/a><span style=\"font-weight: 400;\">]<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He observed:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><i><span style=\"font-weight: 400;\">People are overconfident<\/span><\/i><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The selectors were keen on going with gut feelings when deciding who to pick and how much to pay.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><i><span style=\"font-weight: 400;\">People make forecasts that are too extreme<\/span><\/i><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Scouts were too quick in making forecasts. Their guesses were not accurate. Predicting a player to become a superstar was far fetched.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><i><span style=\"font-weight: 400;\">Winner\u2019s curse<\/span><\/i><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Teams were picking players for more than what they deserved.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><i><span style=\"font-weight: 400;\">Present bias<\/span><\/i><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Teams were more interested in the now. They were picking players based on recent performance.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><i><span style=\"font-weight: 400;\">The false consensus effect<\/span><\/i><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Teams which liked a particular player felt an urgency of buying them. They assumed that the other teams are also interested in buying them. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I would say this paper\u2019s reach is beyond NFL and picking players. Anyone making investment or hiring decisions can make these mistakes too.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I am hoping \u00a0that we will rely more on data than gut feelings as we progress over the time. <\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-2926\" src=\"http:\/\/atuljha.com\/blog\/wp-content\/uploads\/2018\/08\/20140304_072849.jpg\" alt=\"\" width=\"500\" height=\"667\" srcset=\"https:\/\/atuljha.com\/blog\/wp-content\/uploads\/2018\/08\/20140304_072849.jpg 500w, https:\/\/atuljha.com\/blog\/wp-content\/uploads\/2018\/08\/20140304_072849-225x300.jpg 225w, https:\/\/atuljha.com\/blog\/wp-content\/uploads\/2018\/08\/20140304_072849-195x260.jpg 195w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">References:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><a href=\"http:\/\/www.nber.org\/papers\/w11270\"><span style=\"font-weight: 400;\">Overconfidence vs. Market Efficiency in the National Football League<\/span><\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>Richard Thaler is a Nobel laureate and author of the best selling book: Misbehaving. He is a popular figure in the area of behavioral economics. Last week when I was reading \u2018Misbehaving\u2019- the chapter on decision making caught my attention. It talks about how traditional ways of picking NFL players were resulting in losses. The &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/atuljha.com\/blog\/2018\/08\/06\/thaler-nfl-and-decision-making\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Thaler, NFL and Decision making&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[249,3],"tags":[415],"_links":{"self":[{"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/posts\/2924"}],"collection":[{"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/comments?post=2924"}],"version-history":[{"count":2,"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/posts\/2924\/revisions"}],"predecessor-version":[{"id":2927,"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/posts\/2924\/revisions\/2927"}],"wp:attachment":[{"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/media?parent=2924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/categories?post=2924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/atuljha.com\/blog\/wp-json\/wp\/v2\/tags?post=2924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}