Finally, the 24/7 Jeremy Lin is dying down somewhat. A combination of LeBron, Dwayne and the rest of the Miami Heat laying a bit of a smackdown and sending a message to Lin and the Knicks, along with the mid-season All Star break, have combined to (mercifully), let the #Linsanity fall off the radar in the last few days. It is hard to know how the rest of the season will play out for Lin; the Miami game showed opposing teams are now well aware of his game, his tendencies, and have adapted their strategies to counter the elements that Lin has brought to the Knicks in the last few weeks. Lin is a smart and talented player though, and most observers think that while he is unlikely to continue scoring 20 or 25 points a night, he should continue to develop into a quality starting point guard, hopefully filling a glaring hole in the Knicks lineup.
But over 100 words in, this post isn't actually about Lin, at least not directly. As I spent some time this weekend reading many of the articles and posts about #Linsanity that I had bookmarked during the last two weeks, this piece from Wired, 'What Jeremy Lin Teaches Us About Talent' stuck out, not so much for the origniality of the take - that often we aren't very good at recognizing talent when it is right under our noses, but rather for one of the references in the piece, to a 2010 paper called 'The Loser's Curse: Overconfidence vs. Market Efficiency in the National Football League', by Cade Massey and Richard Thaler.
The Massey/Thaler paper examines over two decades of National Football League draft results, compares player draft position to demonstrated performance once the drafted players enter the league, and eventually makes several interesting conclusions about the success in evaluation of potential players by NFL talent evaluators. Chief among these conclusions is that despite ridiculous amounts of easily discoverable demonstrated performance results, (video of draft candidate's college games), detailed and specific pre-draft assessment testing, and years of experience at their jobs, that NFL talent professionals are only slightly better at choosing between any two players than simply flipping a coin - higher drafted players outperform lower drafted players only 52% of the time.
The paper goes on to recommend that based on analysis of the performance of players selected in the draft that 'trading down', e.g. swapping say a team's 1st round selection in the draft, for multiple lower round selections, perhaps for additional 2nd and 3rd round picks, is usually a better strategy than holding on to that high pick, particularly when, as the authors contend, the likelihood of superior outcomes produced by multiple lower round picks is quite high. Essentially, they argue, that NFL teams overvalue high draft picks, a condition only exacerbated by the fact that these high draft picks usually are well known players, and fan and media pressure for teams to select these known quantity 'sure thing' players is really high.
Why do teams often hold on to these high picks, and irrationally chase these sure things? The paper offers the concept of 'anticipated regret', or the idea that missing out on a player, that they had a chance to select, only to see him succeed with another team, is just too painful for teams to stomach, and they feel they have to exercise draft rights on such a player, even when the data suggest that, over time, they'd probably be better off passing, and trading down to accumulate more lower picks.
In the NFL and other sports, anticipated regret is all too real, since the actual performance of players not selected by a given team is all to available. Deciding not to select a highly touted player that turns out to be a star for another team, can often become an albatross, weighing a team down for years, (see Trail Blazers, Portland).
Back in the real world though, anticipated regret does not play into corporate talent evaluation and recruiting all that much. Candidates that we pass on usually head off to parts unknown, and if we do know what becomes of them, we rarely have insight into performance details at whatever endeavor they pursue. We know how the person we did select worked out of course, but that extra bit of information, how the person(s) we passed on turned out, well we can only guess at that.
Which is kind of too bad I think. Because I think we would all get better at evaluating talent if we could see the full picture, not just how the person we hired worked out, but how the ones we didn't hire ended up. Because if we keep missing, well then maybe we'd change our approach, maybe we'd be willing to trade down from time to time, instead of always chasing the sure thing.