As we move into prospect analysis season, it is a good time to give some thought not just to prospects, but the way we think about prospects. I've looked at this topic before but usually revisit the issue this time of year as part of the Process, if you'll pardon the expression.
There is a psychology that goes into player evaluation. I’m not just talking about the psychology of the players in this case, but rather knowledge of the psychology and sociology of the people doing the evaluating, including yourself and your most trusted sources. Study your own filters, and study the filters of the people around you.
We've mentioned before (just a couple of days ago actually) how Colon's draft position as a first-rounder actually hindered his reputation as a prospect by creating unrealistic expectations, expectations that made it harder for many of us to see his true value.
There were also some excellent reader comments from the December 2013 piece that I want to highlight.
It relates to the field of behavioral economics and how the inclusion of flawed information, or the omission of available valid information, in the decision-making process creates market inefficiencies.
There was an interesting article in Vanity Fair a while back that discussed this field and, specifically the impact of the work of psychologist Daniel Kahneman. Kahneman, while studying the decision-making process, discovered that people unknowingly incorporate irrelevant factors into their decision-making process. This discovery was directly at odds with economic theory that viewed market participants as being rational and selfish.
To identify the existence of market inefficiencies, you have to first conclude that the marketplace does not incorporate all readily available information of value. That the decisions of market participants are, in some respect, irrational. Kahneman’s work made that conclusion easier to reach.. . .draft position can serve as an improper anchor point for baseball evaluations. If a player is a late-drafted player, then he constantly has to prove the initial opinion wrong. On the other hand, if a player is an early drafted player, he gets the benefit of the doubt at every turn.
It does seem important to be cognizant of the possible existence of an improper anchor-point in decision-making/evaluation.
I’ll always remember Rob Neyer’s query regarding former 1st overall pick Kris Benson: "What’s the statute of limitations on an opinion?" Kris got chance after chance after chance to live up to his draft reputation, probably far more chances than he earned on his own merit.
Reader Resolution followed up:
This might actually be a better example of a contrast effect given that Colon has been fine but was also taken right after Machado. Or it may relate to theories of prototypicality in that Colon, while fine does not seem like a prototypical high first rounder (similar to Tim Beckham).
A perfect example of an attempt at anchoring would be Robinson Cano asking for 300 million. With that set and anchoring holding true we would expect Cano’s ultimate settlement to be higher than if he had asked for 275 or 250 million. However, anchoring works best when the parties have a very poor understanding of what they’re trying to estimate (e.g., percentages of African nations in the UN, or how much a plaintiff is entitled to following a serious injury), so I’m not sure it applied well in this instance
I should add – a better Kahneman heuristic may be the availability heuristic in that I’d guess that when people are asked to name first round picks, they would be more likely to name successful players despite the fact typically the first round should have more unsuccessful players than successful players. Since successful players are more cognitively ‘available’ it makes Colon seem worse despite there really being no shortage of top-5 busts
One of the things I like best about Minor League Ball is the comments thread; we have a lot of smart people here.
Back on topic. With all this in mind, consider the following questions:
***What IS the statute of limitations on an opinion?
***What is your own most troublesome filter or blind spot?
***Do you take any countermeasures to deal with your filter or blind spot? If so, what are they?