I know that this topic is becoming a common theme on this blog, but there was yet another piece of strong evidence that NFL coaches – who are paid millions of dollars in the hopes of squeezing just a few more wins out of their teams – act too conservatively. Just as the title, “Do Firms Maximize? Evidence from Professional Football” hints at, even when the stakes are high and the best strategy already known, teams don’t always choose that choice.
In this example, being ahead by four points near end of the game might be worse than being ahead by just three points. The reason seems to be that in the latter case, the opposing coach faces the tempting siren song of playing for a tie. That is, the trailing team will choose more conservative plays and try to get into field goal range to tie the game and hope for a good result in overtime. This thinking usually neglects to consider the chance of missing the field goal attempt or, more importantly, that the chance of winning in overtime is basically 50/50, when the chance of obtaining the winning TD at the end of regulation might be significantly higher.
When a team is down by four, in contrast, only a touchdown will do. So there is no choice but to go for the win. Thus, the whole drive is in “four-down territory,” and all kinds of risky passes are on the table. It turns out that a pre-commitment mechanism, like tying the coach to the mast like Ulysses or, similar to Alexander the Great, (supposedly) burning the boats you came on might actually be appropriate:
“When Alexander the Great arrived on the shores of Persia, his army was overwhelmingly outnumbered. The odds against them were terrible. Turning away and getting back in the boats seemed like an option to let them regroup and come back another time. But rather than having an emergency escape plan available, Alexander gave the orders to his men to ‘burn the boats.’ As their only means of retreat went up in flames, legend has it that Alexander turned to his men and said, ‘We go home in Persian ships, or we die.’ “
But if coaches know the correct approach, why do they still play for the tie when available? I think there are two major issues. First, knowing about a cognitive fallacy does not immunize from committing that fallacy. Cognitive psychologist Laurie Santos studies the behavior of monkeys in a “marketplace” in which they can exchange metal washers for food. The monkeys exhibits some of the same irrationalities as human consumers, including the framing effect, in which transactions framed as losses are treated differently than transactions treated as gains. She talks about the researchers falling for the GI Joe fallacy, which she defines as believing that you are not subject to the same mental fobiles as the monkeys, simply because “knowing is half the battle.”
Nicholas Nassim Taleb is the foremost speaker on deep-seated human irrationality, including (or especially) on the part of investors who stand to gain untold fortune if they can overcome their biases. But even he concedes the difficulty of overcoming these feelings in himself.
On the other hand, maybe the coaches aren’t so irrational after all. As Think like a Freak conjectures, the real incentive is not always to win the game for your team, but rather, to not be blamed for losing the game.
So sometimes living a life with the law of the excluded middle is better than hoping for a partial victory.