Do Firms Maximize? Evidence from Professional Football
Open accessAbstract
This paper examines a single, narrow decision—the choice on fourth down in the National Football League between kicking and trying for a first down—as a case study of the standard view that competition in the goods, capital, and labor markets leads firms to make maximizing choices. Play‐by‐play data and dynamic programming are used to estimate the average payoffs to kicking and trying for a first down under different circumstances. Examination of actual decisions shows systematic, clear‐cut, and overwhelmingly statistically significant departures from the decisions that would maximize teams’ chances of winning. Possible reasons for the departures are considered.
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Romer (2006) concluded that teams do not go for it enough if teams are trying to maximize their probability of winning the game.
“They concluded that teams do not go for it enough if teams are trying to maximize their probability of winning the game.”
From Big ideas in sports analytics and statistical tools for their investigation (2023) · cites this paper as Romer (2006)
Cites
“Risk, Ambiguity, and the Savage Axioms.”
Ellsberg, D. (1961) · The Quarterly Journal of Economics · doi:10.2307/1884324 · Cited by 7,891 · see citing works
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Big ideas in sports analytics and statistical tools for their investigation
Baumer, B. S., Matthews, G. J., & Nguyen, Q. (2023) · WIREs Computational Statistics · doi:10.1002/wics.1612 · Cited by 44 · see citing works
- Authors
- Romer, D.
- Affiliations
- National Bureau of Economic Research (US)
- Corresponding author
- Romer, David
- Venue
- Journal of Political Economy
- Publisher
- University of Chicago Press
- Published
- 2006-04
- Volume
- 114
- Issue
- 2
- Pages
- 340-365
- ISSN
- 0022-3808 (ISSN-L)
- 1537-534X
- OpenAlex
- W2133269919
- Cited by
- 217
- References
- 1
- Citations by year
- 2026: 10 · 2025: 12 · 2024: 10 · 2023: 11 · 2022: 9 · 2021: 10 · 2020: 12 · 2019: 13 · 2018: 21 · 2017: 10 · 2016: 7 · 2015: 9 · 2014: 16 · 2013: 12 · 2012: 10
- FWCI
- 20.86
- Type
- journal article
- Language
- en
- Open access
- green
- papers.ssrn.com
- Locations
- Journal of Political Economy (publishedVersion)
- SSRN Electronic Journal (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Sports Analytics and Performance
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
- Keywords
- NFL, maximizing behavior, corporate decision-making, play-by-play data, dynamic programming, sports strategy, winning probability
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