Market Efficiency and Rationality: The Peculiar Case of Baseball
In this lively book, Michael Lewis explores a topic that would seem of interest only to sports fans: how Billy Beane, the charismatic general manager of the Oakland Athletics, turned his baseball team around using, of all things, statistics. What next – an inspirational tale about superior database management? But there are some general lessons in Lewis’s book that make it worth the attention of people who do not know the difference between a slider and a screwball (a group that, unfortunately, includes many lawyers and law professors). Those lessons have to do, above all, with the limits of human rationality and the efficiency of labor markets. If Lewis is right about the blunders and the confusions of those who run baseball teams, then his tale has a lot to tell us about blunders and confusions in many other domains. In that sense, the tale bears directly on continuing debates about behavior, cognition, and law.