Instrumental versus bounded rationality: a comparison of Major League Baseball and the National Basketball Association

Abstract The professional team sports industry is characterized by an abundance of information, defined objectives, and clear consequences. Given these characteristics, researchers have generally assumed that economic actors follow the dictates of instrumental rationality. The purpose of this research is to present evidence that in professional baseball, where player statistics have historically been tabulated and utilized, information is employed efficiently. However, economic agents in professional basketball, where player statistics are less intuitive and not historically tabulated, fail to process information in a fashion consistent with the precepts of instrumental rationality.

[1]  Rodney Fort,et al.  Pay Dirt: The Business of Professional Team Sports. , 1993 .

[2]  R. McCain.  A framework for cognitive economics , 1992 .

[3]  J. Cassing,et al.  Implications of the Auction Mechanism in Baseball's Free Agent Draft* , 1980 .

[4]  Lawrence M. Kahn.  Discrimination in Professional Sports: A Survey of the Literature , 1991 .

[5]  R. McCormick,et al.  COACHING TEAM PRODUCTION , 1989 .

[6]  D. North,et al.  Economic performance through time , 2012 .

[7]  H. Simon,et al.  Rationality as Process and as Product of Thought , 1978 .

[8]  12Frank A. Jr. Scott,et al.  Salary Vs. marginal revenue product under monopsony and competition: The case of professional basketball , 1985 .

[9]  A. Tversky,et al.  On the psychology of prediction , 1973 .

[10]  H. J. Raimondo.  Free agents’ impact on the labor market for baseball players , 1983 .

[11]  Asher A. Blass.  Does the Baseball Labor Market Contradict the Human Capital Model of Investment , 1992 .

[12]  W. Neale,et al.  The Peculiar Economics of Professional Sports , 1964 .

[13]  Amitai Etzioni,et al.  The Moral Dimension: Toward a New Economics , 1989, Journal of Marketing.

[14]  A. Tversky,et al.  Judgment under Uncertainty: Heuristics and Biases , 1974, Science.

[15]  J. Hill,et al.  Professional Baseball: The Reserve Clause and Salary Structure , 1983 .

[16]  H. Hosseini.  Cognitive dissonance as a means of explaining economics of irrationality and uncertainty , 1997 .

[17]  F. Andrew Hanssen,et al.  HAS DISCRIMINATION LESSENED OVER TIME? A TEST USING BASEBALL'S ALL‐STAR VOTE , 1999 .

[18]  L. Ross,et al.  Perseverance of Social Theories: The Role of Explanation in the Persistence of Discredited Information , 1980 .

[19]  A. Hanssen.  The Cost of Discrimination: A Study of Major League Baseball , 1998 .

[20]  G. Scully.  The market structure of sports , 1995 .

[21]  J. Jenkins.  A reexamination of salary discrimination in professional basketball , 1996 .

[22]  George A. Akerlof,et al.  The Economic Consequences of Cognitive Dissonance , 1982 .

[23]  Daniel Rascher,et al.  The NBA, Exit Discrimination, and Career Earnings , 1999 .

[24]  Kenneth E. Boulding,et al.  Essays in Positive Economics. , 1954 .

[25]  G. Scully,et al.  Pay and Performance in Major League Baseball. , 1974 .

[26]  Örn B. Bodvarsson,et al.  A TEST OF EMPLOYER DISCRIMINATION IN THE NBA , 1999 .

[27]  David J. Berri,et al.  Who is 'most valuable'? Measuring the player's production of wins in the National Basketball Association , 1999 .