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Minimax after money-max: why major league baseball players do not follow optimal strategies

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  • Justin Choe
  • Jun Sung Kim

Abstract

Using real-life sports data of Major League Baseball, this paper investigates whether professional players follow the minimax theorem in their strategies. Our empirical results using the 2010 regular-season data show that baseball players do not optimize their strategies: there is a significant difference in their payoffs across strategies, and the sequence of their strategy choices is predictable from their previous actions. Further analysis using individual salaries and key contract variables indicates that a higher salary has a positive impact on following minimax strategies in the regular season. By contrast, a longer contract decreases a player’s incentive to pursue optimal strategies in the postseason. These results have important implications for compensation practices in various fields.

Suggested Citation

  • Justin Choe & Jun Sung Kim, 2019. "Minimax after money-max: why major league baseball players do not follow optimal strategies," Applied Economics, Taylor & Francis Journals, vol. 51(24), pages 2591-2605, May.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:24:p:2591-2605
    DOI: 10.1080/00036846.2018.1558346
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