If a pro basketball team’s opponent hits a better-than-expected proportion of its free throws — 80pc versus 70pc — the coach is half a percentage point more likely to change his starting lineup for the subsequent game, even though the opposing team’s free-throw average was beyond his control, says a group of researchers led by Lars Lefgren of Brigham Young University. Coaches frequently make strategic changes in response to irrelevant factors, especially after a loss, no matter how narrow or meaningless. This behaviour is due to the outcome bias, which leads people to view random negative outcomes as the result of poor choices.

(Source: Management Science)

Published in Dawn, Economic & Business, September 1st, 2014