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.


stockton said...

Salty, I would have to agree with your statement on the whole opportunity cost deal with the Blue Jays. If you want to produce a winning team you have to have great players. Great players have to be brought up through the system, like you mentioned, and develop their skills. I think you should be willing to sign a star player, possibly for more money at the time, for a better return on your asset in the future. I guess it all boils down to whether you want to be an average team now, or if you want the opportunity of being a great team in the future. Great things take time in all aspects, and especially in sports.

Harry said...

I would also have to agree with the other two comments. The reason being is why do you just want an average team, why not go for the best. Maybe in the year 2003 the Blue Jays would have not been the best. But they would have had a foundation with Jose Cruz Jr., and then they would have be able to start building on it. Who knows they could have ended up as the best team, and just not an average team. I guess you also have to stop and think that probably would not have happened with the Yankees around.

sierra said...

I would also like to comment on the Toronto Blue Jays, and their opportunity cost. I also agree with salty, and the other two comments, in which having an average baseball team is not going to get you anywhere in the Major Leagues. The Blue Jays are in the Yankees division, and therefore will never compete with the Yankees or Red Sox with an average team. I think every team needs at least one superstar because they are the people who get the most out of all the players on the team. having a superstar also makes other people want to play for your team, and also watch your team. Jose Cruz Jr. possibly could have been that superstar for Toronto. Until the Blue Jays get some people in the front office that understands this, they will continue to be at the bottom of the American East Division, and also the rest of the major leagues.

Dr. Tufte said...

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).