Is game theory the new sabermetrics?
Picture source: www.fangraphs.com
BY: Ricardo Valerdi
INDUSTRIAL ENGINEER Volume 45 Number 11
Economists have applied it to analyze penalty kicks
Game theory has been around since the 1920s and was popularized by John von Neumann’s 1944 book Theory of Games and Economic Behavior and John Nash’s Nobel Prize-winning work in the 1950s. Since 2003, when Michael Lewis book Moneyball was published, the idea of using quantitative analysis to evaluate players and teams has risen in popularity.
This empirically based analysis is referred to as sabermetrics, which is a mixed acronym for Society for American Baseball Research metrics. Sabermetrics was a true intellectual revolution because it showed that intelligent data use could lead to better decisions than the traditional gut feel or intuition upon which many managers and scout relied.
Applying game theory to sport is not new. Economics have applied it to analyze penalty kicks in soccer to understand the strategy that the kicker and the goalie adopt to maximize their probability of success knowing that there can only be one winner and one loser (referred to as a zero-sum game).
But just like any sports, the outcome will be determined by elements of chance and elements of skill. It is unknown whether game theory has been formally adopted by professional baseball teams or whether it has resulted in improved outcomes, but the fact that players are approaching the game with such a strategy is a good indication of its value.