What Do NBA Referees and MBA Teachers Have in Common?

Over at Marginal Revolution, Tyler Cowen draws an intriguing parallel between accusations made by disgraced NBA ex-referee Tim Donaghy, and models of collusion.

While David Stern has denied explicit collusion between the league and the refs to influence game outcomes, Tyler argues that there may instead be implicit collusion: refs may simply perceive that the league wants them to produce certain outcomes, and the refs will deliver unless the league takes a strong contrary stand. This may explain why star players are so widely perceived to get better treatment, and it could also explain why some of Donaghy’s accusations resonate.

And while strong financial incentives often lead to better job performance, in this case they actually exacerbate the problem, as they make it even more important to the refs that they deliver the outcomes they believe their bosses want. It is an interesting and subtle argument: Read it here.

My own introspection — based on MBA teaching, rather than NBA refereeing — tells me that Tyler’s argument is quite reasonable. Officially, Wharton tells me that my job is to teach students important truths, but sometimes I fear that really my job is to entertain the students instead. You can see that my dilemma is a lot like that facing the NBA refs. And while I’m ashamed to admit it, my teaching does sometimes reflect the entertainment, rather than truth-seeking objectives.

Moreover, I acted more like this when the incentives were highest (when un-tenured) than I do today. If Ivy League profs act this way, is it so crazy to suspect that NBA refs occasionally respond to the incentive to create entertainment, even if it clashes with truth-telling?

David Stern has sought to reassure the public that all is well and that Donaghy’s accusations should be dismissed out of hand. But the fact that the league often issues blanket denials — sometimes of limited credibility — is a real problem for them here. Firms sometimes find it beneficial to deny accusations that are true (like this one), but the long run cost is that they have less credibility when denying damaging falsehoods. Unfortunately for the NBA, fans have no way of discerning the true denials from the PR cover-ups. Moreover, if Tyler is right, it isn’t enough to simply show that the NBA did not ask the refs for particular favors, they need to show that they actively (and equally) discouraged all refereeing errors. If such evidence exists, I would strongly urge Commissioner Stern to make it public.

I discussed these issues at length with ESPN’s Henry Abbott, and he wrote up our conversation for the True Hoop blog.

More generally, how should the League respond to gambling-related concerns? I’ve argued before that the problem with current U.S. gambling laws is the disjunction between our formal laws, which are among the strictest in the world, and the law-in-action: U.S. gamblers have been pushed offshore, and so, in effect are governed by the most lax gambling regulation in the world. Like Rep. Barney Frank, I believe that a well-regulated gambling sector may be better than the current Wild West approach.

Related reading: More on my approach to gambling laws in this New York Times Op-Ed, written when the scandal first broke (see Dubner’s $0.02, here); Joe Drape on how legalizing gambling may make it easier to catch bad guys; and Brian Goff at the Sports Economist expands what it means to manipulate game outcomes.

And while this post has been about how economic analysis can help us understand sports, Andrew Leigh has a nice post on how sports can help us better understand economics.

Update: The WSJ‘s “Numbers Guy”, Carl Bialik, critically assesses the claim that there have been too many 7 game playoff series, here. It’s a clever rejoinder to some sloppy headlines.


heyref

Is it possible that refs call fewer fouls on star players because star players commit fewer fouls? If you're going to have a player foul someone or play in such a way that a foul is likely, maybe that job would go to a non-star so that the star doesn't get into foul trouble. Also, the stars are stars in part because they are better athletes, so maybe they can be as effective as a regular player without resorting to fouls.

I know that anyone who watches basketball can come up with examples of fouls that should have been called on stars, but weren't. But maybe we just don't remember the non-calls on non-stars as well.

Amanda

I have taught at an EMBA program outside the US.
Two things strike me about these students: They are more interested in the networking with the other students than in 'learning' things. They seem more receptive to a pre-digested upbeat workshop presentation approach with limited demands than a more academic/cerebral approach.
In the culture where I teach, this may be a reflexion of the trend towards intense stimulus variation (which (to my mind) started with the popularity of MTV videos) than any concerted effort or demand to be entertained by teachers. These students are required to have more than 10 years of business experience, so they may feel greatly pressured when they return to the classroom; humor/laughter/entertainment can bridge the gap between the denseness of course content and their angst at being back in the classroom...

Dave in La Jolla

This may seem like an odd comparison, but there is something to be learned from NASCAR. A car with a very small advantage in speed will win by a large margin in a long race. NASCAR uses caution flags to reset the field many times throughout the race. The race stays competitive to the end.

I think one incentive for bad NBA officiating is obvious. Runaway games are boring. And since they don't have caution flags in basketball, I think the NBA tries to keep games competitive by arbitrary calls and non-calls, see comment #13.

And there is financial incentive for teams to win at home: Fill the seats with the mostly home crowd. Try pulling ahead in the third quarter if you're the visiting team. You have to beat the home team and the refs.

Let's take a lesson from NASCAR: Every time time an NBA player (or ref) gets knocked to the floor and the sweat cleanup crew comes out, reset the score. Give both teams the highest score so there will be lots of points. And let the refs call it as it is.

Read more...

Greg

Referees do give fewer fouls on star players. The effect size was much bigger than the effect size of the racism in the analysis of the calling of fouls. Here's a link to an article on the report. http://www.nytimes.com/2007/05/02/sports/basketball/02refs.html

sprintman

Took the words right out of my mouth.

Also, playoffs may have more fouls because teams are more excited or a bit more unsettled due to higher expectations during playoffs. I don't think that's an unusual statistic.

30% of all statistics are wrong anyway.

For every fan or coach that cries "it's the official's fault", I dare you to officiate a game one day.

donnolo

CORRECTION -- For the reason stated, I used games TWO and THREE for my sample, not games three and four.

Sorry about the confusion.

SteelWheel1

The whole premise of Freakonomics is that events are driven by the desires of people's self-interest. With that said, why would it be far fetch to believe that the referees or even the NBA league executives would engage in massaging the playoff outcome to enrich themselves?

And for the people who might say these executives don't need the money because they are already ultra-wealthy need only to look at the behavior of extravagantly rich Wall Streeters and corporate executives.

john

Why not make referees life-tenured, like federal judges and professors? We think it increases objectivity and independence in law and academia, so why not introduce it to sports?

A

Does this mean you now have tenure at Wharton? Congrats! (On your webpage, you are still listed as assistant professor. Perhaps you should change this soon!)

Jeffrey

"Officially, Wharton tells me that my job is to teach students important truths, but sometimes I fear that really my job is to entertain the students instead."

For some reason all I could think of after reading this sentence is 24/7 cable news channels:

"Officially, CNN/Fox/MSNBC's job is to report to news to the public from an unbiased journalistic perspective, but sometimes producers fear that really their job is to entertain the audience and increase ratings."

Adam

Here is some data on Dick Bavetta's reff'ing of the Milwaukee Bucks:

http://www.realgm.com/boards/viewtopic.php?f=21&t=814760

I don't know if any conclusions can be drawn, but the disparity between him and other refs is at the least interesting. I'd love to know what a real economist thinks of it.

ttj

The sad thing is that universities are supposed to represent the moral highground for impartiality. This looks like a clear admission that they are not. We might expect games in the NBA to be rigged, but not the admission or teaching process at universities.

Joshua

Are you suggesting that teaching students important truths and entertaining your students are mutually exclusive? As a college graduate who has been out of school for seven years, this is an issue that has kept me from enrolling in an MBA program. I don't want to work all day and then be bored by dry lecturers for a couple of hours each evening. However, I would like to learn. It seems logical that entertained students would be engaged students and thus would learn more. It would be interesting to read about how the implicit requirement to entertain students has really effected the education system.

JohnMcG

It's even more true lower in the academic ladder.

I'm an adjunct at a local for-profit tech school. I am measured on attendance and students passing, as well as student evaluations.

In short, the incentives are not exactly aligned with rigorous, challenging course work. Worse, the students have been conditioned by their faculty's behavior, and rebel when more is asked of them.

--

In the NBA case, I'm not sure what could be done. It's not like the league could institute a counter-incentive in favor of small-market teams and non-superstars.

Suave

Why can't the players and coaches decide which refs should work in the postseason? Afterall, they know better than anyone who is fair, hypersensitive, and who appears to have a bias.

frankenduf

some of the cynicism here is far-fetched- there is certainly sporadic rigging going on, but none likely to affect any of the season-long outcomes, from the fan's perspective- that being said, there is something to the ease of rigging bball games- as the cliche says- no need to watch a bball game- just watch the last 2 minutes- so all you need is a little manipulation during that short timespan to pull a game's outcome to within the spread

NK

Truth and entertainment are not mutually exclusive.

IE

Some NBA fans have long suspected that the referees favor big-market teams over small market ones in playoffs to boost TV ratings.
It's fairly easy to check (given the data is available): just take the number of fouls in playoffs and plot it or build a regression against the size of the market. Of course, big market teams in general are better than small market ones, and it's expected that they would draw more fouls. But it can be controlled by comparing with the regular season data.

Cliff

Aren't NBA refs paid per game?

Don't they have a financial incentive to see the series go on as many games as possible?

I searched, but couldn't figure out how they compensate refs during the playoffs.

bobby g

I'll go you one better. They may not even be consciously aware of a bias in officiating; in fact, it may be likelier that refs have subconscious biases than conscious ones. That was a big point of Tversky & Kahneman's work over the years on cognitive heuristics & biases that has had such a large impact on all the behavioral sciences, including economics.