To do or not to do?
The NYT just reported a paper by a few of my friends about soccer. The basic analysis is that during penalty kicks, goalies should stay in the middle more often than they currently do. The question, of course, is why do they so often jump to one side or the other, when it might be better to stay in the middle.
There might be many reasons for this but one thing that I am curious about is whether one reason is that not doing anything just seems wrong to the goalies. Imagine for example a highly paid stock broker that is trading on a day where there is not much news — would that broker feel the need to trade a lot just to justify his salary to himself and maybe to others? Wold he feel guilty just sitting and doing nothing (even when this is the right thing to do) and as a consequence over-trade?
I am not sure if the “idle hands” intuition is correct, but it does sound like an idea that deserves an experiment. Maybe an experiment where we pay some subjects a small amount of money for trading and others get much more money, and we see if the amount that they get changes their need to trade — even when there is no real reason to trade . . . Anyone want to predict the results?
The Upside of Irrationality, explores some positive and some negative ways that irrationality plays out in our lives.
How would the decoupling of financial incentives to the direct outcome change the situation?
Though perhaps a little bit harder to experiment, but somewhat similar, are situations under which an individual or even an organization is expected (by society, stakeholders, etc) to react upon a perceived threat, yet the do-nothing alternative is more likely to yield a more favorable outcome.
As an example, I’m thinking of this weekend’s political situation between Colombia and Ecuador in which Venezuela is reacting unprovoked.
At the individual level, think of the bullying that happens in schools. Some parents advise their kids to fight back, few advise them to resort to authority immediately while some advise to be ‘mature’ and ignore the bully (do-nothing).
I expect work environment and incentive (monetary and others) to play a crucial role in determining a trader’s behavior here. For example if a trader has a work environment where appearing to trade, matters and trader’s incentive is not affected by the loss, he or she would trade, even when it is not the right thing to do. If the trader is unobserved, either working from home or when the work environment (superiors & peers) do the same or understand his decision to not trade that day. And loss from trade affects trader’s personal incentives, trader will most likely not trade.
It’s the “look busy mentality” or what I call the “The Wal-Mart Government Employee Syndrome” aka “Robot” that we learn as children in school and in our early years of employment.
I had a position where the place was crazy busy, then there would be a bit of down time every once in a while. Since I seldom took breaks or lunch during the busy time I made up for it by reading during the down time, but always ready to jump if needed. About a week or two later i was told by the boss to pretend I was working during the down time, to look busy and not to let others see me reading. In turn, I started taking breaks and lunch at the allocated times regardless of how busy the place was.
I’ve noticed this same kind of mentality when it comes to children in school who complete their tasks before the others. They often feel penalized for completing their work early because the teacher will give these children more work to do just to keep them busy. What I have noticed is that many of these children will pretend to be busy while looking over their shoulders to sneak peaks in their desk at a book or a toy. They will go out of their way to avoid the extra work because they see this as meaningless and as a form of punishment. Already we are creating little neurotic, resentful and sneaky people.
I believe these are good examples of bad management, this particular mentality has nothing to do with production, learning or being human, it is really about putting on appearances – lying, instilling fear and creates an environment that lacks trust and eventually kills creativity and a love of learning.
What does this have to do with the experiment? I think the outcome will depend largely on the individual’s employment history, up-bringing and educational background. Something to consider.
This comment is not so much about your experiment as it is about your post in general. Your comments remind me of people who just cannot sit and listen to save their lives. This applies mainly when someone is venting about a frustration and the “listener” is feeling an obligation to solve the problem, so they come up with various solutions but all the speaker wanted to do was to vent. Where the goalie feels the need to do something, the “listener” feels the need to speak something (because not speaking at all is inconceivable to them). In such a scenario, the “listener’s” advice is often disregarded anyway.
Unsolicited advice has always been a pet peeve of mine. I guess that is the root of my little rant.
Trading and goalkeeping penalties are very different things. For all except the tallest goalkeepers, staying in the middle will not allow you to save a penalty directed to either side, you need to commit early to have a chance of reaching it.
(Penalties are biased towards scoring, that’s their function in the game.)
That’s a big flaw in the linked paper, the other is that game theory takes a big part also. Sure, you’ll save more flubs by staying in the centre, but as soon as you get a reputation for not diving, you’ll see the penalty takes adjust and more shots going to either side.
Hi Dan
Just finished enjoying the audible version of your book. Good stuff.
Just today I was faced with the “goalie” decision: I help some friends with their 401K portfolios. Several weeks ago, the stock market was looking quite glum to me so I advised some dynamic allocation adjustments including taking protective put options to help preserve capital. With some good luck, the strategy worked. Just today, all portfolios show some profits it an otherwise awful stock market. Now here is the decision faced: The market fell to a point of a previous low on the S&P 500. If the market goes up from here, some of the accumulated gain in the put option would be lost. Do nothing, or take action? Ask the audience and, of course, the decision guru, Dan Ariely.
Hi Arnie,
If I know anything about financial decision making it is this: don’t give advice about it
The memory of a good advice will fade fast but the memory for advice went bad will remain for a long long time
Good luck
Dan
Here is a suggested variation on the honesty experiments: Attach a dollar bill with a paper clip to the question sheet (as a reward for participating); half have G. Washington staring at you, other half has the “eye” and “in God we trust” staring at you. Any difference in responses? Washington influence or the eye of God? Need a control group that has a gift certificate for coffee at Dunkin Donuts.
You probably thought about this, but I thought I would try anyway. Cheers.
I have to agree with Meh – I have not read the article, but based upon your comments alone, I feel compelled to answer your question. I have played soccer as a goalkeeper for over 20 years, four of which included play at the collegiate level. I have to say penalty kicks were one of my least favorite parts of the game. To add to what Meh said, part of the reason keepers dive is based upon the angle of the planted, non-kicking foot. However, it is often impossible to reach shots near the corner if you do not dive until after the ball has been kicked. And to answer your other question – yes, to stand there foolishly while the ball is kicked in the back of the net would not endear you to your teammates. I also agree this situation cannot really be analogous to a financial one, at least not in the sense you proposed. Even if you stand in the middle, you will eventually become known for such and players will adapt their strategies. However, I don\’t believe in diving to one side or another arbitrarily – although you are at a disadvantage diving after the ball is kicked, it also provides you with the opportunity to modify your decision if the ball comes directly at you. After all, even if you choose correctly and dive to the correct side, if the ball is perfectly place in the \
As a psychiatrist interested in why folks make decisions, I enjoyed Freakonomics, so your book is now on my to-read list.
Glad to hear from Sara on this one. I figure that it does *not* pay to be in the middle, because then the kicker has a 50-50 shot of going to one side; the extra processing time the goalie needs to decide whether to dive left or right may permit the ball to pass through. However, by standing more to the left (for example), you increase the odds that the ball will be kicked to the right, and thus the time required to cover the extra distance may be less than the time no longer needed to make the decision to go left or right when starting from the middle. Right?
The data here strike me as strange.
What exactly do the researchers mean when they say “give the goalkeeper the best shot at halting a penalty kick”? Does this mean that in fact goalies who stayed in the center halted 33% of kicks or is there some speculative assumption being made about how likely a goalie would have been to stop a given kick (after the fact) had he chosen a certain direction?
This is at the heart of the matter when it comes to rationality, of course. At the pro level (or even the US college level), it’s rare for a kicker to choose to put the ball in the center, but the goalie has to choose beforehand what to do. Beyond high school, there’s no time to choose based on what happens after the ball is struck.
So if goalies were observing more shots that were reachable in the center, it seems like they would adjust naturally.
I’m not sure the data as given demonstrates that. It would be more compelling to see what percentage of the time balls were directed into each third of the goal mouth: the left, middle and right third.
Another interesting example of irrational behavior from the world of sports is the decision to go or not go on 4th and less than a yard in football. The statistics show that there is a pretty high percentage of success in going for it, yet most coaches choose to punt. Obviously there are a number of variables to consider, such as game score, time left, position on the field, and strength of defense. But one interesting thing I have noted is that NFL go for it on 4th down with much less frequency than college coaches, even under similar circumstances. What might account for that?
On the one hand it is interesting to compare the analogy of a goalie that jumps on to one side and that of a stockbroker who trades for no reason. On the other it seems that they are two very distinct phenomenon. The goalie acts on instinct or tries to create an intended instinct on his opponent. He could be trying to be clever. The stockbroker could be trading to get small or big wins from being in his/her position. In corporate America, I have seen that people who get paid more often may be doing less than people who get paid less. This could be for a variety of reasons. However, one could argue that the higher paid worker might not feel compelled to work harder to prove himself/herself. He/She may be working or playing the part to be working on something more strategic. While the lower paid worker might be trying to work his or her way up by working harder to gain attention. Thus, my guess is that a higher paid stock broker might not be trading any more than a lower paid stock broker. In fact my guess is that the higher paid broker would be trading less than his/her peer.