Myron Scholes Forum, February 16, 2011
At Chicago Booth, we know that just because people say something or believe it doesn’t make it so. We look at both theory and data to gain insight that either confirms or challenges existing thinking. In a business school, we do this mostly in the context of economics, along with finance, marketing, accounting and basic business practices. But this approach – and the curiosity that it takes to turn something over on its head, look at it a little differently, and apply rigorous analysis – can lead to novel discoveries in other contexts too. By taking the Chicago approach with everyday debates about sports, professor Tobias Moskowitz, who is a director of the Initiative on Global Markets, delivers insights into both the world of sports and the world of business.
Everybody talks about the home field advantage, for example. But do home teams really win more than their “fair share” of games? Yes…but: conventional explanations, such as the role of the crowd, better knowledge of the home field, or the rigors of travelling do not account for the advantage. Rigorous analysis yields insights into the real reasons why home field advantage exists in all sports: the answer will surprise you.
Professor Moskowitz descibes how some of the same hidden influences that help to determine the outcome of sporting events are also present in business. His insights stem from research into a recently published book, Scorecasting, in which he teamed up with veteran Sports Illustrated writer L. Jon Wertheim to overturn some of the most cherished truisms of sports and reveal the hidden forces that shape how basketball, baseball, football, and hockey games are played, won, and lost