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Is the NBA fixed?
Tim Donaghy, the ref who was caught gambling, says it is. Here's a good deal of evidence that it isn't. Small market teams do well in the draft and reach the Finals at a high rate.
Yet I haven't seen any MSM source, at least not in the context of these allegations, which admits the obvious: star players get favored treatment from the refs. And this equilibrium is self-sustaining without any direct instructions from the Commissioner. As a ref, you know you are expected to allow offensive fouls from LeBron James, the crowd expects it, other refs act that way, and you are never reprimanded for the non-calls. So in at least this one way the NBA is clearly fixed and by the demand of the fans, even if they do not prefer to think of it as such.
But now imagine a nervous ref who wonders -- if only with p = 0.2 -- whether the NBA wouldn't prefer to see the Los Angeles Lakers beat Sacramento and move on in the playoffs. That same ref knows about the convention to favor star players. And hey, the Sacramento team in those days didn't in fact have any real stars. What inference should you draw and how should you behave in your calls?
If the NBA has been tolerating at least one (and surely more) crooked ref, it is unlikely that other ref pathologies have been absent as well. Toss in the $50 billion or so a year bet on NBA games and maybe you have some real action.
So it's hard to avoid the conclusion that the NBA is at least partially fixed, although not necessarily in the conspiratorial sense that many people might be expecting.
Here is what a professional gambler thinks.
The point taken from economics is that there are many ways of enforcing implicit collusion, not to mention that at some margin gains from trade do kick in. If wealthy CEOs will cheat, why won't NBA refs?
Posted by Tyler Cowen on June 13, 2008 at 05:55 AM in Sports | Permalink
Comments
There is a certain similarity btw this nba refs and the posting on "distracting miss daisy": the excessive amount of rules in both driving and playing. I for one hate it when a ref calls a foul because it stops the flow of the game. If it were up to me, only flagrant fouls would be called, since by definition basketball is a physical game, almost every drive to the rim will generate a close call, so whether a foul is called or not, someone will invariably dispute the call
Posted by: enrique at Jun 13, 2008 6:34:26 AM
Normally, I'd bet on the pro gambler. High interest in the game being decided by odds--"The Donaghy scandal basically made me question whether or not I wanted to continue betting the sport."
And if he's dirty, he has a high interest in keeping it secret.
"I also try to avoid all the "it's fixed" conspiracy talk because its counter-productive to actually handicapping the games. "
Everyone else is at least subconsciously conflicted. Maybe they don't even know they are doing it.
But, in the story, he's basing his assessment on the NBA PR blunders rather than his data. It's not people's intentions or aspirations that count. It's what they do.
"I keep on reading how Donaghy "provided information" as though this was the crux of the scandal. The guy fixed games. He didn't "provide information" he bet on games he was working, and made calls to insure he would win those bets. It's pretty basic stuff but the NBA has somehow turned the focus of the whole investigation away from this and instead focused on the "inside information" angle."
The league is dirty. This may be a case of the coverup worse than the crime, but just the same. Just because someone definitely covers up, doesn't mean they aren't guilty.
And this is fascinating. Buffett and Munger could teach an entire course, or two, on these two sentences.
"I would have continued living in my older brother's basement and finished up my degree -- the money I bet wasn't life changing money, but if I won the bet with the 7 - 7.5 to 1 odds I felt like I could really change my life.
The only time I really regretted making the bet was when the Lakers were down, what was it, 12 points going into the fourth quarter of Game 7 vs. Portland in the western conference finals."
Posted by: Andrew at Jun 13, 2008 6:49:25 AM
I don't believe it was mentioned in that interview, but the amount he bet on the Lakers at 7-1 was 80k, and he was a college student working an hourly wage job.
Posted by: BIllWallace at Jun 13, 2008 7:30:23 AM
I'm not persuaded by the argument that the league suspended players from big market teams for leaving the bench during fights. Such suspensions are automatic and apply to all players who leave the bench for any reason. There's not a lot of discretion involved.
It might be tricky to prove or disprove the kind of cheating that Donaghy alleges. If you look at pre-Black Sox baseball, you can see Hal Chase's teams doing systematically worse when he came to town and better when he left. But that's a star player, who's always playing for the same team, who was pretty consistently on the take. Now suppose you have a league which is corrupt but not fixed. There will be a limited number of games where the league even cares who wins, and there's a lot of natural variation in game-to-game outcomes. It would be a lot harder to answer whether there's unsystematic corruption going on.
Posted by: Zach at Jun 13, 2008 9:16:29 AM
If he had $80k long on the Lakers, he sure wasn't a professional gambler at that point. Hopefully he's learned bankroll management.
That would entail capping your gains by making hedge bets as the season progressed, such as betting 10k straight up on Portland in Game 7 to lock in a guaranteed gain.
There are plenty of human biases, and one seems to be pattern recognition. Throw in enough anecdotes or vague details and a conspiracy theory beckons (rigged NBA, 9/11, clutch hitting, grassy knoll).
How much merit do Donaghy's claims have? I'm interested to know, but how would you allocate governmental resources to exploring NBA conspiracies, baseball steroid users, or football spy techniques?
Posted by: e at Jun 13, 2008 9:32:58 AM
Unless he's profiting from the Donaghy insider information, I don't see why the allegations should make him less likely to gamble. If anything after these allegation the NBA will probably be cleaner than ever because of the scrutiny. Just like the safest time to fly is right after 9-11 because everyone's on the lookout for terrorist attacks.
Posted by: Mo at Jun 13, 2008 10:40:01 AM
How does the size of the market have anything to do with rigging games? In fact it is the exact opposite: it is better financially to rig games that everyone thinks will be a blowout in favor of the larger team as the the payoff is a lot higher.
Posted by: BlogReader at Jun 13, 2008 10:43:34 AM
You hint at a Schelling model (i.e. slight discriminatory preferences result in larger discriminatory patterns). But don't make the step.
Also, why no comparisons with other sports. Baseball and football both officiate their respective sports more by the book.
IMO, Basketball is very different - more like a staged semi-improvised dance controlled be loose rules set by the organization, and also by external sources (Nike-commercials).
One question I have had, but I haven't found data to answer is: in playoff games conditioned on a blowout at halftime what is the probability that the score shifts neutral in the second half versus remains the same or expands.
Posted by: FreeMealsInTheyPrytaneum at Jun 13, 2008 12:36:37 PM
enrique: I for one hate it when a ref calls a foul because it stops the flow of the game. If it were up to me, only flagrant fouls would be called, since by definition basketball is a physical game, almost every drive to the rim will generate a close call, so whether a foul is called or not, someone will invariably dispute the call
This wouldn't reduce the number of fouls called per game. It would merely cause players to foul (in terms of what we currently conside a foul) more frequently and severely since they would be able to get away with it.
Maybe the NBA should evolve into something like this?
Posted by: Scrutineer at Jun 13, 2008 2:07:08 PM
A lot of the examples that the writer cites as being evidence of non-fixing seem more like orchestrated drama to me, not unlike WWE "plots". A big fight in the NBA finals gets headlines for an otherwise boring series? Pitting the small guy (the scrappy non-superstar teams) vs. the perennial giants because everyone loves the 'ol David and Goliath theme? In my mind, the examples he cites seem to hurt his argument and make it all look even more contrived. When you consider how much is on the line for the NBA and how much money they stand to gain by drumming up a game 7 or some crazy headline-grabbing controversy, its hard to believe that they're NOT doing it. It is entertainment, after all, not life or death (although some forget this).
Posted by: 12345 at Jun 13, 2008 3:39:58 PM
A lot of the examples that the writer cites as being evidence of non-fixing seem more like orchestrated drama to me, not unlike WWE "plots". A big fight in the NBA finals gets headlines for an otherwise boring series? Pitting the small guy (the scrappy non-superstar teams) vs. the perennial giants because everyone loves the 'ol David and Goliath theme? In my mind, the examples he cites seem to hurt his argument and make it all look even more contrived. When you consider how much is on the line for the NBA and how much money they stand to gain by drumming up a game 7 or some crazy headline-grabbing controversy, its hard to believe that they're NOT doing it. It is entertainment, after all, not life or death (although some forget this).
Posted by: 12345 at Jun 13, 2008 3:40:00 PM
I find all sports with penalties or fouls kind of annoying.
Posted by: Paul N at Jun 13, 2008 9:41:10 PM
There may be another factor at play here, too. Yes, I suspect Tyler's point is on target, but NBA refs also have the most protective union contract in U.S. professional sport. No one is allowed to criticize the officiating; players, coaches, and team owners who do face hefty fines. That's all well and good if you're Mark Cuban and can simply write a check, but it's not so good for the average coach or player. Then, of course, the highest-paid superstars, who can easily afford to pay the fines, are the least likely to complain because, per Tyler's argument, they're the ones who benefit from the poor officiating.
NBA refs are coddled and have perverse incentives all the way around.
Posted by: Franklin Harris at Jun 13, 2008 10:46:25 PM
I'd like permission to use your blog post in a book, to be published by McGraw Hill in January, as a sidebar. Can we discuss?
The book is about the conditions that leaders must create to hold people accountable, but we're using non-obvious and cool examples where we can find them.
Posted by: Tanya at Jul 26, 2008 3:56:11 PM
Anyone notice that Kobe Bryant didn't go to the line nearly as much as he normally does in Game 6? The game played a day after Donaghy made the allegations? The League's worst problem is it's playoffs that includes all but 5 teams... you can make the playoffs with a LOSING record. Basketball may or may not be fixed but the league is ruined as it is.
Posted by: Jim at Aug 4, 2008 5:03:57 PM
