tag:blogger.com,1999:blog-1752771132348583018.post1567167017446329538..comments2024-03-29T00:50:36.331-05:00Comments on Managerial Econ: Is Mark Sanchez a sunk cost?Luke Froebhttp://www.blogger.com/profile/06832270922187297624noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1752771132348583018.post-75426945625364119992016-12-06T10:29:32.285-06:002016-12-06T10:29:32.285-06:00This is a classic case of sunk cost fallacy. The i...This is a classic case of sunk cost fallacy. The investment that has already been made by the Jets should not influence their decision going forward. It is similar to when movie goers sit through a long movie because they paid for the ticket even though they can clearly see that the movie is horrible. (e.g. Legends of The Fall) They would be better served to get up and leave after the first half hour or so. It is important that the Jets consider the hidden costs of cutting Sanchez such as salary cap penalties. A better option might be to bench him and sign a free agent off the street to start in his place. Scott Ewingnoreply@blogger.comtag:blogger.com,1999:blog-1752771132348583018.post-12153153135987775702015-02-20T20:26:31.166-06:002015-02-20T20:26:31.166-06:00A very nice article that I found that demonstrated...A very nice article that I found that demonstrated opportunity costs with sports and how the decisions made can affect an organization or individual. The article discusses how decisions are made in major league baseball regarding player salaries, roster spots, and decisions to trade players. This scenario shows how even though it may seem like a team can give up a very good player for what seems like nothing, there is additional information that is made as well that may not be seen.<br /><br />The decision made was to trade a very good player who would cost a significant amount of money to the team, in order to get six additional players who were all good to their own accord but would cost much less money individually. The opportunity cost to this decision that was made was to keep the original player and bring in five additional players from the minor leagues who would have very minimal salaries. The team management obviously felt that it was more beneficial to have six good players, then one very good and five mediocre players. <br /><br />So it is very clear that there can be opportunity costs in just about every decision made, whether they are easily identifiable to those outside of the decision-making process or not. The key is to ensure that the decision that is being made is clearly the best of the options.<br /><br /><br />Moffatt, Mike. “Baseball Players and Opportunity Costs.” Retrieved from http://economics.about.com/cs/sportseconomics/l/aa021903a.htm<br />Anonymoushttps://www.blogger.com/profile/12063710856202050564noreply@blogger.com