Impact Aversion in Arbitrator Decisions
59 Pages Posted: 7 Feb 2014 Last revised: 20 Jan 2015
Date Written: January 19, 2015
An aversion to salient mistakes leads arbitrators to make mistakes more often, even where directives are clear, incentives strong, and post-hoc evaluation perfect. We study the choices of Major League Baseball umpires, who are directed to make binary decisions according to a single, objective criterion: pitch location. Using state-of-the-art pitch location technology, we examine over one million such decisions and find that every umpire in our sample distorts his directive by avoiding the option that would more strongly change the expected outcome of the game. This impact aversion is consistent with an avoidance of public scrutiny. Umpires face criticism from the public for mistakes that disrupt the course of the game; impact-averse umpires avoid scrutiny by avoiding game-changing options that could be mistaken.
Keywords: field study, arbitration, judges, referees, decision making, impact aversion
JEL Classification: D03, D81, L83
Suggested Citation: Suggested Citation