Wednesday, May 13, 2009

Malcolm Gladwell On Reverse-Order Drafts

This is from the Malcolm Gladwell - Bill Simmons email exchange published on espn.com.

"The consistent failure of underdogs in professional sports to even try something new suggests, to me, that there is something fundamentally wrong with the incentive structure of the leagues. I think, for example, that the idea of ranking draft picks in reverse order of finish -- as much as it sounds "fair" -- does untold damage to the game. You simply cannot have a system that rewards anyone, ever, for losing. Economists worry about this all the time, when they talk about "moral hazard." Moral hazard is the idea that if you insure someone against risk, you will make risky behavior more likely. So if you always bail out the banks when they take absurd risks and do stupid things, they are going to keep on taking absurd risks and doing stupid things. Bailouts create moral hazard. Moral hazard is also why your health insurance has a co-pay. If your insurer paid for everything, the theory goes, it would encourage you to go to the doctor when you really don't need to. No economist in his right mind would ever endorse the football and basketball drafts the way they are structured now. They are a moral hazard in spades. If you give me a lottery pick for being an atrocious GM, where's my incentive not to be an atrocious GM?

I think the only way around the problem is to put every team in the lottery. Every team's name gets put in a hat, and you get assigned your draft position by chance. Does that, theoretically, make it harder for weaker teams to improve their chances against stronger teams? I don't think so. First of all, the principal engine of parity in the modern era is the salary cap, not the draft. And in any case, if the reverse-order draft is such a great leveler, then why are the same teams at the bottom of both the NFL and NBA year after year? The current system perpetuates the myth that access to top picks is the primary determinant of competitiveness in pro sports, and that's simply not true. Success is a function of the quality of the organization...

The bigger point here is that what consistently drives me crazy about big-time sports is the assumption that sports occupy their own special universe, in which the normal rules of the marketplace and human psychology don't apply. That's how you get the idea of a reverse-order draft, which violates every known rule of human behavior."

I find the previous ideas interesting and true. This is America, why are we rewarding people for failing?

2 comments:

  1. Brilliant. I love the NBA lottery and I wish we could do that for the MLB. One would weight it by how the teams did so the worst team has the highest chance of getting a top pick, but nothing is set. I think a big reason in sports for the same teams being at the bottom is because they have owners who meddle in the business and make the bad decisions. The best owners let the people they put in place do their jobs.

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  2. I think this is a very interesting post also. Sawyer, the lottery in the nba doesn't include teams that make the playoffs. The implemented that rule so you wouldn't throw games at the end of the year to get a number 1 pick, but you can still throw them to get a higher % of getting the number one pick.

    Like cleveland. They threw lots of games to try to get lebron, and it worked for them. But last year the bulls only had like a 2% chance of getting the #1 and they did, Derrick Rose. Both players turned the teams around(bulls made playoffs, one a series too) and lebron is a stud and they are gonna do good things this year. But it took the Cavs(last in the league) several years to get good while the bulls who just missed the playoffs last year just made the playoffs this year.

    That definitely adds some interest behind the lottery, but I don't feel like this really applies to baseball. There is no saying the number one pick will ever make the big leagues, while the number 1 in basketball is guaranteed to play the first game whether as a star of a bench player, they make the team. Baseball still relies on great scouting and development of young players for success rather than the number 1 pick.

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