Monday, January 11, 2016

The Redskins and Behavioral Economics

It is old news by now that the Washington Redskins lost their Wild Card game at FedEx Field last night and, with it, their post-season hopes.

The history is not pretty.  The once-formidable team (which won three Super Bowls in '82, '87 and '91) has by my count gone through seven coaches and 16 quarterbacks in the last 16 years, always hoping for another Lombardi Trophy.

One player said this to a Washington Post reporter:

"There's no moral victories.  We don't walk off this field smiling and saying, 'You know, I tell you what.  We won the division.'  All that is in the past.  All we wanted to do was to get a win at home, and we didn't do it."

Washington fans are trying to look on the bright side.  The team won nine and lost seven games in 2015, its first winning season since 2012, when it went 10-6 and also lost the Wild Card game.  Hopes are high for the latest quarterback and coach.

Maybe next year.

Meanwhile, I have the impression that an economist named Richard Thaler watched the game, perhaps from his office at the University of Chicago Booth School of Business, and that he was smiling.

Enter the Economist

Lately I have been reading Thaler's popular book, "Misbehaving: The Making of Behavioral Economics." Last night I happened to come across its discussion of how professional football teams employ sub-optimal strategies when selecting players in the annual football draft.

Thaler has much to say about the Washington Redskins.

(The theme of Thaler's book, and of the field of behavioral economics in general, is that people often act like "humans," making decisions based on impulse and emotion.  This insight refutes the primary assumption on which classical economic theory had rested for hundreds of years -- that people act like "econs," rationally evaluating choices and seeking to maximize their outcomes.  Thaler's examples run from humorous to humiliating; he does seem to be on to something.)

At the end of the last millenium, Thaler and his colleagues analyzed many years of football player drafts and came to some counterintuitive conclusions.

While teams treasured early first-round draft picks (there are seven rounds in each year's draft) and were often willing to trade away several lower-round or future year's picks to get each season's most sought-after player or the second one, this strategy didn't yield the best results.

"So," says the book, "our research yielded two simple pieces of advice to teams.  First, trade down.  Trade away high first-round picks for additional picks later in the draft, especially second-round picks.  Second, be a draft-pick banker.  Lend picks this year for better picks next year."

Turned out that you couldn't hang a team's future on a single player.  Also, that the most highly rated player might not be as good as his college stats suggested when he reached the NFL.  The better bet was to take a longer view -- selecting several promising second-round players each year.  Over time, more of these players tended to outperform expectations in their first contract years and offer more value (and wins) for the money spent.

When you think about it, it makes some sense.  There is no "I" in "football team," and building any kind of team is usually a process that takes years.

On the other hand, professional coaches who have spent years studying football games may be reluctant to consult number-crunching, matrix-spreading economists when looking for skilled talent on the field.

Thaler and the Redskins

The Washington Redskins owner, Dan Snyder, bought the team in 1999 and learned shortly afterward about Thaler's research.  Snyder had team executives call the economist, and there followed several group meetings in which the econs explained their football drafting strategy.  The football guys seemed to like the plan.

Then came the 2000 football draft, in which the Redskins shocked Thaler by reverting to "human" principles.  He writes:

      "The team did the opposite of what we had suggested!  They moved up in the draft and
      traded away a high draft pick next year to get a lesser one this year.  When we asked our
      contacts what happened we got a short answer.  'Mr. Snyder wanted to win now.'"

The story continues:

      "This was a good forecast of Snyder's future decisions.  In 2012 the Redskins had the
      sixth pick in the draft, meaning they had been the sixth worst team in 2011, and they
      were desperate for a high-quality quarterback.  There were two highly rated quarterbacks
      that year, Andrew Luck and Robert Griffin III (RG3). Indianapolis had the first pick and
      had announced their (sic) intention to take Luck.  The Redskins wanted RG3.  The second
      pick belonged to the St. Louis Rams, who already had a young quarterback they liked, so
      the Redskins made a deal with the Rams.  They moved up four spots from the sixth pick to
      the second one, and in addition to giving up that sixth pick they gave the Rams their first-
      and second-round picks for the following year, 2013, and their first-round pick in 2014.
      This was an astonishing price to pay to move up just four spots."

Football fans remember the result:  RG3 had a great start, then several injuries and then not so much success.

Thaler was still annoyed at the Redskins' failure to adopt his drafting suggestions when he was writing his book, which was published in May 2015.  Here is his postscript to the football chapter:

       "The Redskins had a late-season game in 2014 against the St. Louis Rams, the team that
       received all those picks Washington relinquished to acquire their dream player.  At
       the beginning of the game, the Rams' coach sent out all the players they had chosen with
       those bonus picks to serve as team captains for the coin toss that began the game.  The
       Rams won the game 24-0 and RG3 was sitting on the bench due to poor play.  We will
       see whether Mr. Snyder learns to be patient."

Hell hath no fury like a behavioral economist scorned, it seems.

Note:  This story calls to mind the popular Michael Lewis book of 2003 -- "Moneyball: The Art of Winning an Unfair Game" -- that profiled an Oakland Athletics general manager who used player statistics to hire talent that allowed the As to perform better than expected against teams with much higher player budgets.

The GM, Billy Beane, looked for players who got on base more often than others, whether by hits or walks.  It yielded higher scores for Oakland, at least until other teams started to copy the strategy.

Baseball people always had been more absorbed by player stats than football people.  Beane just took the analysis further.

Thaler did something similar by studying when football players were selected in the draft and then analyzing their subsequent achievements over several seasons of play.

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