Monday, November 5, 2007

Fear of failure causes failure.

The incentive conflict between NFL owners, who tend to be entrepreneurial and focused on outcomes, and managers, who are often focused on not screwing up, manifests itself in coaches reluctance to go for it on fourth down. According to Economist Paul Romer, the expected benefits from going for it on fourth down are much bigger than the expected costs:
teams should regularly be going for it on fourth down, even if it is early in the game, even if the score is tied, and even if the ball is on their own side of the field.
From Washington Post, via Greg Mankiw.

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