Steroids, Baseball, and Economics

Steve Buffum writes:

I was thinking of this when I read Buster Olney’s description of the behavior of baseball players in 2003 in the face of steroid testing. Olney seemed to believe that this was a spectacular case of outrageous “selfishness” on the part of those players who chose to use PEDs. If you draw this as a game-theoretical matrix, though, you find that the Nash Equilibrium is, in fact, exactly where the real-life system ended up. For the purposes of this analysis, it does not matter exactly what the effects of PEDs are on performance, only that the individual player perceives a significant value to using them. The players’ actions are based on their beliefs, not necessarily on any grand longitudinal study of physical results.

[...]

In a sense, having players testing positive for PEDs in this circumstance doesn’t represent anything extraordinary. It’s pretty much the result predicted from a combination of Game Theory and Human Behavior. Somewhere, John Nash is nodding patiently.

HT: Gbenga Ajilore

2 responses to “Steroids, Baseball, and Economics

  1. With more and more managers turning to statistics with their players, I think we will see an increase in the use of game theory in baseball soon! Here is a cool article about how it could be used in the future: http://www.mindreign.com/en/mindshare/Global-Economics/Game-Theory-e2-80-99s-Potential/sl35291137bp491cpp10pn1.html

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