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Do sunk costs affect expert decision making? Evidence from the within-game usage of NFL running backs

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  • Quinn A. W. Keefer

    (California State University San Marcos)

Abstract

The presence of the sunk-cost fallacy in expert decision making is tested by examining the within-game usage of players in the National Football League (NFL). Using the exogenous variation in compensation from the NFL’s free agency rules, we show that compensation, which is a sunk cost, significantly increases the number of rushing attempts for NFL running backs. The relationship between rushing attempts and compensation is estimated to be unit elastic. The increase in compensation from being eligible for unrestricted free agency has an equivalent effect on the number of rushing attempts as an additional 174–222 rushing yards in the previous season, which has a value of 13.9–17.8 offensive points.

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  • Quinn A. W. Keefer, 2019. "Do sunk costs affect expert decision making? Evidence from the within-game usage of NFL running backs," Empirical Economics, Springer, vol. 56(5), pages 1769-1796, May.
    • Handle: RePEc:spr:empeco:v:56:y:2019:i:5:d:10.1007_s00181-017-1399-y
    DOI: 10.1007/s00181-017-1399-y
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    1. Alexander Hinton & Yiguo Sun, 2020. "The sunk-cost fallacy in the National Basketball Association: evidence using player salary and playing time," Empirical Economics, Springer, vol. 59(2), pages 1019-1036, August.
    2. Keefer, Quinn A.W., 2019. "Decision-maker beliefs and the sunk-cost fallacy: Major League Baseball’s final-offer salary arbitration and utilization," Journal of Economic Psychology, Elsevier, vol. 75(PB).
    3. Quinn Keefer, 2021. "Sunk costs in the NBA: the salary cap and free agents," Empirical Economics, Springer, vol. 61(6), pages 3445-3478, December.
    4. Keefer, Quinn & Kniesner, Thomas J., 2019. "Running the Risk of an Injury in the NFL: Short-Run and Career Consequences," IZA Discussion Papers 12556, Institute of Labor Economics (IZA).
    5. Jeff Hobbs & Vivek Singh, 2022. "The endowment effect and the trading of draft picks in major professional U.S. sports," Economic Inquiry, Western Economic Association International, vol. 60(4), pages 1929-1942, October.
    6. Quinn Andrew Wesley Keefer, 2021. "Did the 2011 Change to NFL Rookie Compensation Alter How Sunk Costs Affect Utilization?," Journal of Sports Economics, , vol. 22(4), pages 387-411, May.

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