Loss Aversion in the N.F.L.

Football coaches are known for being extraordinarily conservative when it comes to calling a risky play, since a single bad decision, or even a good decision that doesn’t work out, can get you fired. In the jargon of behavioral economics, coaches are “loss-averse”; this concept, pioneered by Amos Tversky and Daniel Kahneman, holds that we experience more pain with a loss of x than we experience pleasure with a gain of x. Who experiences loss aversion? Well, just about everyone: day traders; capuchin monkeys; and especially football coaches.

Which is why the last play of yesterday’s Chiefs-Raiders game was so interesting. With five seconds left, Chiefs coach Dick Vermeil had a tough decision to make. His team was trailing by 3 points with the ball inside the Raiders’ 1-yard line. If the Chiefs ran a play and didn’t score, they would likely not have time for another play and would lose. If they kicked the easy field goal, the game would go to overtime — and even though the Chiefs were playing at home, the Raiders had moved the ball easily late in the game and Vermeil, as he would later admit, was scared that the Raiders would win the coin toss in overtime and promptly score, winning the game without the Chiefs ever having a chance.

In retrospect, it wasn’t all that tough of a gamble. Choosing between a) a very significant gain if his team could accomplish the relatively simple act of moving the ball two feet; or b) a shadowy outcome that seemed as likely to end in loss as in victory, Vermeil did what most of us would probably do if we didn’t have several million people peeping over our shoulders, ready to criticize us: he went for the touchdown.

Vermeil sent in a running play, and Larry Johnson dived into the end zone, and the Chiefs won. The cover headline on today’s USA Today: “Chiefs’ Bold Gamble Hits Pay Dirt at Home: Kansas City shocks Oakland with touchdown after forgoing typing field goal on last play of game.”

The fact that Vermeil’s decision became the lead story is one good indicator how rare it is for coaches to take such a risk. Here is what he later told reporters: “Wow! I was scared. I just figured I’m too old to wait. [Vermeil recently turned 69.] “If we had not made it, then you guys would have had a lot of fun with that. It was not an impulsive thing. It was the right thing for us to do.”

Congratulations to Vermeil for making a good choice that turned out well. Here’s hoping a few of his colleagues will be envious enough of the attention he gets for making this wise gamble and follow suit.

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  1. Robert Schwartz says:

    Yet another reason why I hate the NFL.

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  2. Robert Schwartz says:

    Yet another reason why I hate the NFL.

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  3. guaif1 says:

    I’d like to suggest that aversion to loss is biologically based. I tend to remember losses more than I remember successes. Losses tend to hurt more than successes tend to heal.
    In the book “Tipping Point” (sorry to cite another book) the author(s) note that a person treated with contempt is more likely to be sick, from a cold or other maladies. This suggests are biological reaction to a negative event. (This is not precisely on point, but a loss and being treated with contempt are both significantly negative). My observation is that the opposite is also true, i.e., a person that acts with contempt tends to gain strength from such conduct. For example, dominant chimpanzees tend to have a higher level of testosterone, indicating the act of domination increases help hormone levels. (I understand that there are other explanations, i.e., that dominant chimps started out with higher levels of testosterone, which allows them to be dominant).
    I wonder if anyone has seen any biological evidence to support inference from my experiences.

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  4. guaif1 says:

    I’d like to suggest that aversion to loss is biologically based. I tend to remember losses more than I remember successes. Losses tend to hurt more than successes tend to heal.
    In the book “Tipping Point” (sorry to cite another book) the author(s) note that a person treated with contempt is more likely to be sick, from a cold or other maladies. This suggests are biological reaction to a negative event. (This is not precisely on point, but a loss and being treated with contempt are both significantly negative). My observation is that the opposite is also true, i.e., a person that acts with contempt tends to gain strength from such conduct. For example, dominant chimpanzees tend to have a higher level of testosterone, indicating the act of domination increases help hormone levels. (I understand that there are other explanations, i.e., that dominant chimps started out with higher levels of testosterone, which allows them to be dominant).
    I wonder if anyone has seen any biological evidence to support inference from my experiences.

    Thumb up 0 Thumb down 0
  5. Bob Davis says:

    Here’s hoping a few of his colleagues will be envious enough of the attention he gets for making this wise gamble and follow suit.

    But if that were to happen, then it wouldn’t be rare enough to merit the attention of the press, and so it would make no sense to use that strategy as a way to seek attention.

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  6. Bob Davis says:

    Here’s hoping a few of his colleagues will be envious enough of the attention he gets for making this wise gamble and follow suit.

    But if that were to happen, then it wouldn’t be rare enough to merit the attention of the press, and so it would make no sense to use that strategy as a way to seek attention.

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  7. jschultz says:

    I too agree that Vermeil’s decision was less risky then the ESPN talking heads would have you believe. I wish that more coaches thought like that. Risk aversion seems to be second nature to most professional coaches. Fortunately, this leaves the fans of the game frustrated and scratching their heads on a constant basis. As part of this discussion, I would like to quantify this line of thinking: whenever a QB goes way downfield, four events can happen. 1. The ball is caught by the receiver, 2. The ball is intercepted by the covering back, 3. The ball lands harmlessly on the ground or 4. There is a pass interference call. I seem to think, based upon no scientific study at all, that there is a 25 % or a 30 % shot that the team throwing downfield will get a pass interference call in their favor. If that is true, which I have every reason to believe that it is, why are SOME (not all) coaches so risk averse to throw downfield? Great postings everyone!

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  8. jschultz says:

    I too agree that Vermeil’s decision was less risky then the ESPN talking heads would have you believe. I wish that more coaches thought like that. Risk aversion seems to be second nature to most professional coaches. Fortunately, this leaves the fans of the game frustrated and scratching their heads on a constant basis. As part of this discussion, I would like to quantify this line of thinking: whenever a QB goes way downfield, four events can happen. 1. The ball is caught by the receiver, 2. The ball is intercepted by the covering back, 3. The ball lands harmlessly on the ground or 4. There is a pass interference call. I seem to think, based upon no scientific study at all, that there is a 25 % or a 30 % shot that the team throwing downfield will get a pass interference call in their favor. If that is true, which I have every reason to believe that it is, why are SOME (not all) coaches so risk averse to throw downfield? Great postings everyone!

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