I disagree with Paul completely. While the only objective isn't to win, I
don't think other objectives of upper management really play a role in the
non-inclusion of sabermetrics. These people really believe that
traditionalist tactics are the key to winning.
Obviously, the main reason owners don't necessarily like winning is
because it takes money to do so. However, sabermetric inspired tactics can
help teams do better with a given amount of money, as is the case with the
A's.
But, do fans prefer seeing "smallball" tactics? I don't think so. I mean,
rarely anything gets fans more excited than the home run. Also, even if
fans liked seeing bunting and base stealing, this doesn't explain why
teams get and use players to do things that simply don't happen. I mean,
sac bunts and stolen bases DO happen and there are particular players who
can be relied upon to steal alot. However, teams while also use and sign
pitchers because they think they are "ground out pitchers" or "pop fly
pitchers." There is no such thing. Over the long run, all pitchers have
about the same % of balls hit into fair territory (and aren't home runs)
become base hits. They can only control how many strike outs they get, how
many bases on balls they give up, and how many homers they give up. Even
if fans liked seeing a pitcher get alot of ground outs and pop ups, there
would be no way to predict what pitcher would get them so there is no
reason to choose a pitcher on this basis. Yet they do. Its because teams
are (willfully) ignorant of the findings of sabrmetrics, not because they
choose not to use them.
Also, even if executives are concerned about more than winning, isn't that
what managers are concerned about? Why do they send players to steal or
bunt? Also, what about the majority of baseball commentators and fans who
believe in traditional tactics? Certainly they aren't in on the owner's
plot. Also, it seems to me like practically nothing brings in fans like a
winner.
I suppose one could analyze the non-use of sabrmetrics in terms of
heterodoxish political economy. Take theories of intra-firm conflict.
Scouts have alot to lose if teams could find the players they want by
looking at stats. Managers have alot to lose if it becoms obvious that
they are largely superfluous. Players who do well in "traditional"
categories also have alot to lose. And all of these groups have at least
some capacity to block the introduction of moneyball methods.
Michael - managers almost make no difference, especially when teams use
sabrmetric influenced methods. Obviously, smallball takes more
strategizing than trying to get on base, being conservative when you ge
there, and trying to hit for power.
Most sabrmetric people seem to think batting order (something managers
make) doesn't matter. This is only partly true. The batting orders
actually used would fare no better than a randomly selected one, and this
has led some to conclude the batting order is meaningless. However, there
are alternate batting orders that do increase performance. However, these
reduce to simply having the best hitter period hit first and so on...none
of the "fast guy hits first, power hits 3-5" nonsense. And this doesn't
take much managerial cunning.
On the other hand, while a manager can do little to help a team, they can
do lots to hurt them. Overusing pitchers is one example.
> Paul is correct that sports team are not necessarily focused on
> winning. Perhaps the greatest irrationality was the exclusion of
> blacks.
> This particular article points to something else -- namely, the
> irrationality of executive salaries. Beane refused to accept Macha's
> money demands, whereas corporations give the executives whatever they
> want.
> I don't know how much managers add to baseball teams. I suspect that
> they are not nearly as important as good players. I am under the
> impression that they mostly act as babysitters for spoiled
> millionaires.
>
>
> On Thu, Oct 05, 2006 at 02:42:06PM -0400, Paul wrote:
>> What am I missing? Moneyball has quite a following among neoclassical
>> micro-economists and many of its founders and proponents were
>> economists. Yet, like neoclassical micro, it seems to miss the elephant
>> in
>> the room and is more about ideology than actual practice.
>>
>> As I understand it, advocates of Moneyball, sabermetrics and the rest
>> see
>> large discrepancies between their statistical models of optimum baseball
>> team strategy and what teams actually do. They say that most of this
>> difference is due to an outmoded mix statistic priorities/models and
>> that
>> their technocratic techniques can fix this.
>>
>> No doubt some of the discrepancy is due to their better statistical
>> ideas. But it seems to me there is a far larger divergence from
>> "optimum
>> efficiency" because baseball is a business - "irrational" decisions are
>> taken so as to increase total profit (or sometimes just shareholders
>> profit). And, in many cases, the old fashioned mix of statistical
>> priorities (which largely included the same factors but in a different
>> mix)
>> more closely reflects the goals of the teams' owners (although not the
>> fan).
>>
>> Profit partly comes through winning games ("optimum efficiency") which
>> can
>> boost revenue. BUT it also comes through other considerations such as
>> boosting market appeal by favoring play that is exciting albeit
>> "sub-optimal". AND one can just lower costs (rely on revenue sharing,
>> drafted young players who, like "illegal" immigrants or workers in an
>> outsourced location can't "feely" negotiate, etc). Each team's market
>> has
>> its own conditions that produce that team's profit maximizing mix of
>> such
>> factors (winning games, flashy play, low costs, etc).
>>
>> So, for example, Moneyball is right to emphasize the value of walks
>> rather
>> than just hits ('on base percentage' rather than 'batting average').
>> But
>> *in some markets* the excitement of extra hits will bring in more
>> revenue
>> than if the team moves from 15 games behind 1st place to 12 games behind
>> through gaining extra walks. Likewise, it may be true that trying to
>> steal
>> bases is not smart, but for teams adopting low-wage strategies, having
>> an
>> aggressive running game helps cover up the fact that your business plan
>> is
>> to finish last. Similar caveats apply to "small ball" and "forcing high
>> pitch counts vs free swinging home run hitters.
>>
>> For my purposes, baseball analogies offer the opportunity to show how
>> the
>> profit motive can force on us losing and "inefficient" overall
>> strategies. "Moneyball" when its pretending to be the owner's best
>> strategy misleadingly distracts from that point.
>>
>> It reminds me of the "Capital Controversies". The real point is that it
>> shows how normal market forces will routinely lead companies to choosing
>> a
>> mix of production technologies that produces less for society as a whole
>> -
>> but gives the owners greater profit - i.e. capitalism inherently gives
>> us
>> sub-optimal technologies. Instead, the insiders of Cambridge England,
>> enamored with their math, emphasized "reswitching" - an insider's
>> technological point that, by itself, just initially focuses on how
>> marginalist capital theory is wrong. No surprise that the debate died
>> out
>> without much impact.
>>
>> Paul
>>
>>
>>
>>
>> At 06:00 PM 10/4/2006 -0700, you wrote:
>> >This article is interesting for what it says about executive wages and
>> >what it didn't
>> >say. If you scroll down to the reference to $400,000, the article says
>> >that the
>> >higher executive wage will hurt the team by reducing the money
>> available
>> >for the
>> >workers. I wonder they are teaching this at the Stanford Business
>> School.
>> >
>> >Leonhardt, David. 2006. "Why C.E.O.'s Aren't Sitting in the Dugout."
>> New
>> >York Times
>> >(4 October).
>> >"Just over a year ago, the man who held the purse strings at a private
>> company
>> >outside San Francisco began negotiating a new employment contract with
>> the
>> >executive
>> >who ran the day-to-day operations. The company had recently turned
>> >around, thanks in
>> >part to the executive, and the company, understandably, wanted to keep
>> >him. It
>> >offered him a salary of almost $1 million a year, which it considered
>> in
>> >line with
>> >the market."
>> >"The executive asked for almost $1.4 million. But the company wouldn.t
>> >budge. Its
>> >message was simple: We like you and we want you to stay, but that
>> doesn.t
>> >mean you
>> >can name your salary."
>> >.Anytime you.re running a business, you have to set a value on
>> employees
>> >relative to
>> >your business,. the part-owner in charge of the negotiations told me a
>> >couple of
>> >weeks ago. .And before any negotiation starts, you have to consider
>> your
>> >alternatives..
>> >"So the executive and the company parted ways. It started interviewing
>> other
>> >candidates, and he began interviewing for similar jobs elsewhere.
>> Until the
>> >situation took an unexpected turn -- and more on that later -- an
>> >otherwise good
>> >relationship looked as if it was going to be ruined by money. We know
>> >these details
>> >because the company in question was not an ordinary private company.
>> It
>> >was the
>> >Oakland A.s. The part-owner was Billy Beane, perhaps the best-known
>> >general manager
>> >in baseball. The executive was the team.s on-field manager, Ken
>> Macha."
>> >"One of the many baseball fans following this story last October was a
>> >retired banker
>> >named Robert L. Joss, who had become the dean of Stanford Business
>> School
>> >after
>> >having been a vice chairman of Wells Fargo and the chief executive of
>> an
>> >Australian
>> >bank. As he read the local newspaper accounts of the breakup between
>> Mr.
>> >Beane and
>> >Mr. Macha, Mr. Joss was struck by a thought: "You.d never see this in
>> >corporate
>> >America."
>> >"It.s difficult, in fact, to come up with a single example of a company
>> >and its chief
>> >executive splitting up over pay. Chief executives retire and are
>> >fired. But as long
>> >as they remain on the job, they evidently don.t end up disagreeing with
>> >their boards
>> >about how valuable they are. The negotiation over a chief executive.s
>> pay
>> >is one
>> >that never seems to fail, which, of course, means that it isn.t much of
>> a
>> >negotiation
>> >at all. It.s more like a friendly conversation."
>> >"But the Ken Macha story is a wonderful allegory because it highlights
>> a
>> >more subtly
>> >human problem with pay. When directors at a big company think they
>> have
>> >found the
>> >right person for the job, they persuade themselves that no one else on
>> >earth could do
>> >it as well. They basically fall in love. Once that happens, almost no
>> >price seems
>> >too high."
>> >"The Oakland A.s, however, can.t afford to fall in love. Their modest
>> >budget allowed
>> >them to spend just $62 million on players this season, compared with
>> the
>> >Yankees.
>> >$200 million payroll."
>> >"The contrast between this hard-headed approach and corporate America.s
>> >cult of
>> >personality was especially clear to Lewis Wolff, the A.s 70-year-old
>> >managing partner
>> >who was both Mr. Beane.s and Mr. Macha.s boss. Before buying the A.s
>> last
>> >year, Mr.
>> >Wolff ran 20th Century Fox.s real estate division for a time, and he
>> now
>> >sits on the
>> >boards of two New York Stock Exchange companies. .At my advanced age,.
>> >Mr. Wolff
>> >said, laughing, .I.m learning from Billy..
>> >"Billy -- as Mr. Beane is almost universally known -- understood that
>> Mr.
>> >Macha had
>> >real value as a manager. He helped the A.s overcome a dreadful start
>> in
>> >2005 and go
>> >on a late-summer run that nearly won them another division title. But
>> Mr.
>> >Beane also
>> >understood that the additional $400,000 a year his manager wanted was
>> >$400,000 the
>> >team wouldn.t be able to spend on a player who could make the
>> difference
>> >between
>> >second place and first."
>> >"So the team held firm, and one year ago this week, after the 2005
>> regular
>> >season
>> >ended, Mr. Macha returned home to the Pittsburgh suburb of Export,
>> where
>> >he began
>> >looking for a manager.s job with another team. On the plus side, the
>> >teams with
>> >openings generally gave their manager more of a say than Mr. Beane.s
>> carefully
>> >proscribed system did. But these other teams also weren.t very good,
>> and
>> >there was
>> >no guarantee that Mr. Macha would get one of the jobs anyway."
>> >"A week later, Mr. Macha received a handwritten note from Mr. Wolff.
>> >.You.ll be
>> >successful at anything you do,. it said, according to Mr. Macha.
>> .Thanks
>> >for a great
>> >season.. The letter caused Mr. Macha to reconsider. That night, he
>> >called Mr.
>> >Beane, and they had a conciliatory conversation that ended with Mr.
>> Beane
>> >saying,
>> >.What can I do to help you?. Within a few days, they signed a deal
>> very
>> >similar to
>> >the one the A.s had originally offered."
>> >"This season, despite a rash of injuries, the team built by Mr. Beane
>> and
>> >run by Mr.
>> >Macha won its division again. While the Boston Red Sox (payroll: $120
>> >million), Los
>> >Angeles Angels ($103 million) and San Francisco Giants ($91 million)
>> have
>> >all been
>> >eliminated, the A.s beat the Minnesota Twins, 3-2, in the first game of
>> >the American
>> >League playoffs yesterday. The two teams play again this afternoon."
>> >[The A's won again.]
>> >"As Mr. Joss, the Stanford dean, sees it, there is more than one lesson
>> to
>> >the story.
>> >Certainly, board members should realize that no employee is
>> >irreplaceable. But they
>> >should also remember that they have great leverage in pay negotiations,
>> >because being
>> >a chief executive -- like being a big-league manager -- is an
>> enormously
>> >appealing
>> >job."
>> >.Not only is it good economically, but it.s meaningful work: The
>> executive
>> >is doing
>> >something he loves, and he is part of something,. Mr. Joss said. .You
>> >wonder how many
>> >C.E.O..s would really leave these jobs..
>> >
>> >
>> >
>> >--
>> >Michael Perelman
>> >Economics Department
>> >California State University
>> >Chico, CA 95929
>> >
>> >Tel. 530-898-5321
>> >E-Mail michael at ecst.csuchico.edu
>> >michaelperelman.wordpress.com
>
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail michael at ecst.csuchico.edu
> michaelperelman.wordpress.com
>
