Can Irrational Decisions Be Corrected? A Football Case Study ⇢
Lehrer takes a look at David Romer’s analysis of fourth down decisions by NFL coaches and discovered that they don’t go for the first down enough, and opt for kicking way too much: about twice as much as they should, statistically.
Jonah Lehrer via Wired
If kicking a field goal or punting on fourth down is such a bad idea, then why do coaches always do it? To explain the consistently bad decisions of NFL coaches, Romer offered two different answers. The first is risk aversion. If coaches followed Romer’s strategy, they would fail about half the time they were within ten yards of the endzone. This means that instead of kicking an easy field goal and settling for three points, they would come away empty handed. Although that’s a winning strategy in the long-run, it’s hard to stomach. (As Daniel Kahneman notes, “Worst case scenarios overwhelm our probabilistic assessment, as the mere prospect of the worst case has so much more emotional oomph behind it.”) After a long drive down the field, fans expect some points. A coach that routinely disappointed the crowd would quickly get fired.
The second reason coaches stink at making decisions on fourth down is that they stink at statistics. As Romer politely writes, “Many skills are more important to running a successful football team than a command of mathematical and statistical tools…It may be that individuals involved want to make the decisions to maximize their teams’ chance of winning, but that they rely on experience and intuition rather than formal analysis.”
So firms don’t always maximize profits, if only because coaches aren’t rational agents. But I’m most interested in what happens next. Can coaches learn from their mistakes? Can a rigorous analysis of flawed behavior help us correct that flaw? This is the optimistic hope behind much of behavioral economics, which assumes that identifying the irrational quirks of humans allows us to escape those quirks. Thanks to Romer’s analysis, it’s now easy to make the right decision on fourth down.
So how have coaches reacted to this data? In 2001, before Romer published his findings, the average team went for it on fourth down 15.1 times per season. During the 2010 season, the average NFL team went for it on fourth down…15.125 times. Perhaps 2011 will be the year coaches start to maximize profits. But I’m doubtful.
There are a few sad lessons here. For one thing, it appears that NFL teams don’t closely follow the behavioral economics literature, even when it directly involves the sport. But the lack of change in fourth down decision-making is also a depressing reminder that human biases are exceedingly hard to fix. When the game is on the line we default to our lazy hunches and instincts, even when the rational choice couldn’t be more clear.
What is the equivalent of the fourth down bias in your world, or business? Can we learn from the cognitive biases of football coaches, even if they can’t, or are we just as stuck as they are?
And the lesson to learn isn’t the stats, or just that you should look at the objective reality of things: we need to be able to break out of the social conventions that ensnare us, even if it leads to others questioning our judgment.
This reminds me of the John Holt definition of leadership:
Leaders are not what many people think — people with huge crowds following them. Leaders are people who go their own way without caring, or even looking to see whether anyone is following them. “Leadership qualities” are not the qualities that enable people to attract followers, but those that enable them to do without them. The include, at the very least, courage, endurance, patience, humor, flexibility, resourcefulness, determination, a keen sense of reality, and the ability to keep a cool and clear head even when things are going badly. This is the opposite of the “charisma” that we hear so much about.
[Holt cited by Caterina Fake]