In this article, by Mike Moffatt, he gives a scenario on baseball and opportunity cost. He believes that baseball fans do not know the concept and just play off of their emotions when a team doesn't sign a certain player. Moffatt gives a scenario that the Totonto Blue Jays had to make in the 2002 season. I think Moffatt doesn't understand opportunity cost. The Blue Jays choice was to pick between Jose Cruz Jr. and five minor league players or sign six average baseball players. Moffatt chose the six average players. The Blue Jays also went with the six players. I think they should of signed Jose Cruz Jr. an emerging young player at the time. That would have given the Blue Jays the opportunity to develop their thriving farm system. Farm system is the minor leagues, by the way. The cost of losing a star player at the time is a bigger cost than not being able to sign six average players and be an average team due to that. Tell me what you think.
http://economics.about.com/cs/sportseconomics/l/aa021903a.htm
1 comment:
The post touches on opportunity cost (which is good) but there is a deeper issue here regarding sports, economics, and social sciences in general.
That is, that sports management is a non-experimental "science". It is hard to analyze a case like this because you can't do it one way, and then go back and do it over the other way to compare the outcomes. Economics is also a (largely) non-experimental science. This makes these fields harder to analyze, but not impossible. The best you could do would be do apply some regression techniques (as discussed in Chapters 4 and 5 of our text).
BTW: Our library has a book called "Curve Ball" about the importance of statistics in baseball, and has "Moneyball" on order (that is about how the Athletics have been successful lately using management techniques learned in business schools).
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