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No Such Thing As A Free Lunch, Sports Edition…

May 15th, 2009 · 10 Comments
Behavioral Econ · Sports

Preface: I am cranky. I had my Boston Sports Mania Thursday all planned out, complete with game 7 Bruins tickets and everything. And while there was a sweep involved for Boston, it was in the wrong direction. (Also, I would argue that there are few things as soul-crushing as a sudden death overtime loss.) Seriously, what are the chances? (Somewhere in the neighborhood of 1 in 8, technically, but still…) The one upside is that, with some help from a last minute t-shirt gift, I managed to fashion a reasonably cute Bruins outfit:

Completely appropriate for a hockey game, I would argue. Anyway, the friend that I was at the game with had invited me to game 7 of the last round of the Celtics playoffs, but unfortunately I hadn’t seen the text message in time to take him up on his offer. He sent me this email the next day, which illustrates an interesting psychological point:

“So I’ve lived in Boston almost three years, and there’s quite a bit I haven’t done [yet]. I figure if I’m only going to go to one Celtics game, by golly I’m going to do it right. Floor seats, behind the basket, Game 7 of an amazing series. Seats any basketball fan would kill for — not to mention a rabid Boston sports fan.

Now I’m pretty free with my money. Not because I have a lot, just because I know I’m going to spend it eventually, probably on college loans. So paying $987 for two Celtics tickets isn’t a big deal, given the quality of the seats and the weight of that particular game. In this case, I covered the cost of the tickets and my roommate said he’d pay me back whenever. Kind of like putting on an old coat and finding $20 in the pocket. I can work with that.

But then roommate proceeds to ‘pre-game’ a little TOO much. I ask him to stop, awkward silence ensues, incoherent argument 10 minutes later, old shit sneaks into current discussion, I say ‘fuck it’ and go in search of a new Game 7 companion.

This is where things get weird. For the life of me, I can’t GIVE AWAY Celtics tickets. Game 7 of the playoffs. Floor seats. What gives!?

I understand there’s some guilt associated with accepting high-dollar tickets from a friend, associate, colleague, or acquaintance. No one wants to feel indebted like that. So for the people that gave me a tentative ‘yes,’ I explained that I viewed the tickets as a sunk cost, and simply wanted to salvage the evening by spending it with someone who’d have a wonderful time. [cricket… cricket…]

So eventually Wendy came along, and wrote me a check for $100 after the fact, along with a heartfelt Thank You card I might frame, or at least pin to the corkboard for a bit. I might not even cash the check. Or maybe I will, so I can go to another Sox game.

The point is, I’m still perplexed that it was SOO difficult to give away tickets to a playoff game. Is that tinge of guilt so overwhelming in people as to forego such an incredible opportunity? Wouldn’t the experience be worth it? I wasn’t asking anyone to name their first-born child after me — I just wanted to be in good company.

If the field of Behavioral Economics is as advanced as, say, Organizational Behavior, I suspect you have a theory that addresses The Celtics Phenomenon. If not, I guess I can chalk it up as “Nobody Likes Me, Guess I’ll Go Eat Worms.” In any case, I hope the story makes for an interesting line of ponderation.”

I can, for the record, say that my friend is perfectly nice to be around, so we can rule out jackass cost as an explanation of the above scenario. Furthermore, I doubt that the response can be attributed to people not caring about basketball, since a. it’s Boston, b. you don’t have to specifically like basketball for a playoff game 7 to be reasonably entertaining, and c. it’s Boston. As such, I really do think my friend is on to something. Consider an economic experiment called the ultimatum game:

There are two players in the ultimatum game- let’s call them Jack and Jill. Jack is given $10 and then instructed to make an offer to Jill regarding how the $10 should be split between the two of them. Once he makes an offer to Jill, she has the option to either accept or reject the offer. If Jill accepts, the $10 is split according to Jack’s offer. If Jill rejects, both Jack and Jill get nothing. From a pure monetary perspective then, Jill should accept any offer given to her, since even one penny is technically better than nothing. The only justification, then, for rejecting an offer is spite or punishment. (It is important to note that Jack and Jill don’t know each other and don’t expect to interact again in the future, so reasons such as teaching Jack to behave can be ruled out, unless of course you think that Jill is trying to do a favor for society by teaching Jack to not be a d-bag.)

So what happens in the ultimatum game in practice? There are two interesting observations:

  1. Offers are typically higher than pure economic theory would predict, with a $5/$5 split being a surprisingly popular offer
  2. There are more rejections than pure economics theory would predict, and offers where Jill gets less than $4 or so are typically rejected

These observations imply, at the very least, that people place some value on a transaction being considered fair, and also that people are willing to sacrifice in order to maintain this notion of fairness. (For the record, I, as an economist, would accept just about any offer, but I wouldn’t make an “unfair” offer, since I don’t expect people to be as objective as I am. Then again, I also would have jumped on the ticket offer and worried about money and/or fairness later.)

Why is this relevant to the Celtics example above? The Celtics example is just another form of perceived fairness in a transaction, albeit in a different direction. I doubt there are many examples of Jack offering $9 in the ultimatum game, and I also doubt that Jill would reject the offer in that case, since doing so would punish Jack. However, I am guessing that people see the Celtics example as analogous to the following:

Jack has the opportunity to split $10. He makes an offer to Jill, who can accept or reject. If she accepts, the proposed split takes place. If she rejects, Jack gets the $10. (This analogy holds if you assume that my friend with the tickets can find someone else who is willing to buy the extra ticket.)

In this case, it seems more plausible that Jill would want to reward Jack for a particurly generous offer. What Jill doesn’t entirely consider is that her “reward” leaves Jack sitting by himself at the Boston Garden. Oh how good intentions go awry sometimes…

Tags: Behavioral Econ · Sports

10 responses so far ↓

  • 1 Todd // May 15, 2009 at 12:51 pm

    Go Hawks! (oops)

  • 2 Isaiah // May 15, 2009 at 12:52 pm

    Another thing to consider is the value people place on there time. If you’re friends are academics then time might be exceptionally precious so if they have little warning they might have other plans. This to me is like we someone asks you to go out at the last minute.

  • 3 Jacob // May 15, 2009 at 1:35 pm

    Where does marginal benefit of the publicity of David Ortiz’s suckiness outweigh the marginal benefit of his contribution to winning when he’s actually hitting??

  • 4 Anthony // May 15, 2009 at 2:37 pm

    And this Flyers fan was looking forward to the Bruins taking out the Penguins.

  • 5 allan // May 15, 2009 at 3:19 pm

    Jody – is this that rare a phenomenon? It just seems that people try to avoid what they perceive as an imbalance of obligation in a social situation.

    I imagine you’d get similar results if a friend was in moderate financial straits and you offered a substantial, open-ended loan.

    The interesting question for me (and probably for an actual practicing behavioralist) is how people respond to loaning friends money in a more formal (due date, interest) vs. informal setting.

    [Also on the behavior front – I’m glad I didn’t have to choose between rooting for Pittsburgh and Boston]

  • 6 Dan L // May 15, 2009 at 10:11 pm

    Instead of running off and hypothesizing and theorizing, I suggest that you first need to investigate the empirical data (or rather, datum, since this is a singular event). How many people did your friend ask? Who were these people? Why did they turn him down? For example, we know that you didn’t take the ticket only because you didn’t see his text in time. (Just like in those stupid cellular commercials!)

    I conjecture that everyone who turned him down either had some form of prior obligation or has little interest in basketball. My own hypothesis (without examining the data) is that the people who turned your friend down did so because they just didn’t value the ticket much (for any of a variety of reasons) and not out of any sense of “fairness.” Or they’re just too retarded to operate their phones properly 😉 Seriously, if I were econgirl, I would be really really pissed at myself.

    If anyone is reading this and actually would say no to the free ticket on the grounds of “fairness,” please pipe up.

  • 7 sharkbite // May 16, 2009 at 12:10 am

    I agree with Dan L regarding analyzing the variables; and in the interest of behavioral economics I would consider how, specifically, the offer was presented. For example did he place a dollar amount on the tickets when offering them? Did he adjust the presentation of free playoff tickets to his audience? i.e. c0-workers, family, etc.

    I for one would feel entirely different about his sincerity if he never divulged the ticket cost.

    The amount of “fairness” I would perceive from a similar situation would be influenced by “who” in my life was asking. My brother, best friend, co-worker I barely know.

    The person considering the offer knows information regarding the presenter as well. Their reputation. He may not be a “jackass” but that’s only one reason for the declinations.

    And finally the level of person in your friends life might have been a part of the happenstance. For instance, one could consider themselves a “last resort” on the list of people the person giving them away. A person might think “Why is he calling me? Certainly he has better friends he would have called first.”

    All, in my opinion of course, valid influences in decision making, but then again………….THEY’RE NBA PLAYOFF TICKETS and you actually live in Boston otherwise you wouldn’t have been offered the tickets. I don’t live in Boston or know much about basketball but would have jumped on that in half a heartbeat.

    I’m with Jodi “TAKE THEM. and worry about that other crap later.

  • 8 Bart // May 18, 2009 at 10:48 am

    As a side note, the ultimatum game is interesting in that it looks at spiteful behaviour by humans, the only species on the planet known to be spiteful. If this game was played with lab rats, they (like econgirl), would take whatever the hell was offered to them and be extremely happy (not drawing any comparisons between Jodi and rats of course).

    Then again, rats don’t think about toying with other rats’ emotions. I guess that’s yet another example of a behavioural economist questioning the assumption of “rat”ionality…

  • 9 VD // May 19, 2009 at 3:14 pm

    I would have gone with you to the game in a heartbeat.

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