The neoclassical vision of the world rests upon the notion that economic actors "know that which they do." In contrast, as James Peach and Richard Adkisson (1997) have noted, the work of such institutionalists as Thorstein Veblen, Clarence Ayres, John R. Commons, and John Kenneth Galbraith are driven by a desire to expose the mythology people employ to explain the world observed. Within this tradition, we consider the words Veblen offered on professional sports. (1)
This peculiar boyishness of temperament in sporting men immediately becomes apparent when attention is directed to the large element of make-believe that is present in all sporting activity. Sports share this character of make-believe with the games and exploits to which children, especially boys, are habitually inclined. Make-believe does not enter in the same proportion into all sports, but it is present in a very appreciable degree in all.... Except where it is adopted as a necessary means of secret communication, the use of a special slang in any employment is probably to be accepted as evidence that the occupation in question is substantially make-believe. ( 1953, 170-171) Contrary to the neoclassical vision, in which economic actors base their actions upon reality, Veblen saw the world of sports as make-believe. To illustrate the make-believe nature of professional sports, we turn to the National Basketball Association (NBA). Fans have asserted that some NBA players can choose to elevate their performance in the postseason. (2) Consider a typical quote from a sports writer:
Even if one despised the Los Angeles Lakers with an indefatigable passion, their history of making devastating, huge shots with games, series and seasons on the line cannot be ignored. Robert Horry, Derek Fisher and, of course, Kobe Bryant have all displayed the ability to consistently toss pressure aside and stroke game-changing shots. (Martin McNeal, "Bryant Takes Turn at Hitting Big Shot," Sacramento Bee, June 9, 2004) The NBA's official Web site even ranks what it calls "prime time" players by posting player career differentials between points scored in the playoffs and points scored during the regular season.
The largest "prime time" mythology has most likely developed regarding Michael Jordan, who has often been labeled the greatest basketball player in the history of the game. Consider the dramatic story told about game 6 of the 1998 NBA finals between the Chicago Bulls and Utah Jazz. The Bulls led the series three games to two but needed to win one of two games in Utah to win the NBA championship. With twenty seconds remaining, it appeared that a seventh game would be necessary to decide the outcome of the series. The Utah Jazz had both the ball and a one-point lead. The Jazz still needed to score, so the ball went to one of the most prolific scorers in NBA history, Karl Malone. Jordan, though, proceeded to steal the ball from Malone. On the subsequent possession, Jordan had the ball and the following unfolded:
The defender (Byron Russell of the Utah Jazz) loses his footing and falls to the court as he tries to keep the best player in the game from blowing past him. Michael Jordan seizes the moment. He stops on a dime, elevates and lets fly with the shot that will win or lose the game. Nothing but net. (Sporting News NBA Guide 1998-99, 117; italics added) The above story suggests that Jordan was able to elevate his game at the moment the Bulls needed to score in order to win the game. The box score from the same contest, however, reveals a different story. Prior to the game-winning shot, Jordan had taken thirty-four shots and made only fourteen, a success rate of 41 percent. Had Jordan just converted at a rate of 47 percent, his regular season performance, he would have already made two additional shots before the final seconds of the game and the game winning shot would not have been necessary. One wonders, if Jordan could choose to elevate his game and make a shot when it was needed, why he did not choose to elevate his game earlier in the contest and avoid missing twenty shots? Furthermore, if Jordan had this ability, why did he convert only 34.6 percent of his shots in game 5, a game the Bulls lost by two that would have also clinched the title?
Confirmation Bias in Basketball
Perhaps the way in which empirical evidence is processed by economic actors will influence their perception of reality. Herbert Simon introduced the concept of "bounded rationality" into the economists' dictionary in an effort to
focus attention upon the discrepancy between the perfect human rationality that is assumed in classical and neoclassical economic theory and the reality of human behavior as it is observed in economic life. The point was not that people are consciously and deliberately irrational ... but that neither their knowledge nor their powers of calculation allow them to achieve the high level of optimal adaptation of means to ends that is posited in economics. (1992, 3) As noted by Amitai Etzioni (1988), the limits of the human mind have also been noted in the work of cognitive psychologists who introduced prospect theory) In essence, prospect theory states that people utilize various heuristic devices to simplify incoming information in an effort to overcome the limited ability of the human mind to process complex information. Such simplification tools bias a person's computations in a fashion that renders subsequent decisions inconsistent with the precepts of instrumental rationality.
One such device is the concept of confirmation bias, introduced in the work of Daniel Kahneman and Amos Tversky (1973). Under confirmation bias, people tend to more often notice...