Showing posts with label Oil. Show all posts
Showing posts with label Oil. Show all posts

Tuesday, March 27, 2012

The Winner's Curse


As the funstravaganza (not a real word) that is NFL free agency winds down, I am reminded again that there is a structural reason that free agent contracts in every sport pay more than players are “worth.” It turns out that the reason is slightly more complicated than: The owners are all crazy (though it still explains why Daniel Snyder, in particular, is crazy). The exception to this is the late 1980s in baseball, when owners agreed to simply not offer contracts to free agents from other teams. This actually happened, you can look it up. It bears mentioning that if this were attempted today, the internet would melt.