Saturday, February 14, 2009

Contracts for basketball players: the principal-agent problem in a team sport

The NY Times has a fascinating article on basketball, focused on the Rockets' Shane Battier: The No-Stats All-Star. But the larger focus of the article is on basketball as a team sport in which there is considerable tension between self interest and team interest for players who are measured and rewarded by their individual statistics. That is, players may be tempted to shoot rather than pass, or vice versa, in order to improve their statistics even when a different action would have a greater chance of improving the score, and many of the important defensive things a player like Battier does are not even measured by conventionally reported statistics. The article suggests that basketball contracts may change, as teams start to understand incentives better.

"There is a tension, peculiar to basketball, between the interests of the team and the interests of the individual. The game continually tempts the people who play it to do things that are not in the interest of the group. On the baseball field, it would be hard for a player to sacrifice his team’s interest for his own. Baseball is an individual sport masquerading as a team one: by doing what’s best for himself, the player nearly always also does what is best for his team. “There is no way to selfishly get across home plate,” as Morey puts it. “If instead of there being a lineup, I could muscle my way to the plate and hit every single time and damage the efficiency of the team — that would be the analogy"
"When I ask Morey if he can think of any basketball statistic that can’t benefit a player at the expense of his team, he has to think hard. “Offensive rebounding,” he says, then reverses himself. “But even that can be counterproductive to the team if your job is to get back on defense.” It turns out there is no statistic that a basketball player accumulates that cannot be amassed selfishly. “We think about this deeply whenever we’re talking about contractual incentives,” he says. “We don’t want to incent a guy to do things that hurt the team” — and the amazing thing about basketball is how easy this is to do. “They all maximize what they think they’re being paid for,” he says. He laughs. “It’s a tough environment for a player now because you have a lot of teams starting to think differently. They’ve got to rethink how they’re getting paid.”"

The principal-agent problem is everywhere.


John said...

There is one such stat -- the point differential that exists while the player is on the court. You may not have stellar individual stats, but if your team scores more than the other team scores while you're playing, it is a good indication that you are increasing the quality of the team with play execution, stat-less defense, and other intangibles, especially when this stat compares favorably to the other players on your team.

Anonymous said...

Perhaps, but from the larger league perspective, shouldn't selfish play be encouraged?

Winning is zero-sum, but great stars can pull up the profile of a sport and help increase the salaries of all players by setting new precidents.

Great selfish players are much more effective then winners when it comes to increasing the net worth of a sport.

aram harrow said...

John: the problem is that players aren't randomly put on the court. Also, while on the court, a player benefits those on the bench by giving them time to rest.

If players randomly sat out entire games, that might work a little better.

Anonymous: cooperative play is usually tactically more interesting than when everyone shoots as soon as they get a chance.