There is No 'I' in Team: Career Concerns, Risk-taking Incentives and Team Outcomes
forthcoming in the Journal of Economics and Management Strategy
39 Pages Posted: 26 Oct 2014 Last revised: 22 Jul 2020
Date Written: July 22, 2020
National Basketball Association (NBA) contracting rules provide plausibly exogenous variation in career concerns near contract end. We use this setting to study how individual career concerns affect risk-taking behavior and can sabotage team performance. Using the frequency and duration of player injuriesfrom 1991 to 2013 we measure individual risk-taking behavior.We find that the average player’s likelihood of missing a game due to injury falls by 0.06 percentage points (or over 100% relative to the mean injury rate) in the final three months of his contract, and when missing games due to injury is unavoidable, his recovery time drops by 22 days. However, “elite” players with virtually no career concerns actually miss more games due to injury. Finally, we find that elite players missing too many games and “average” players playing before healthy, combine to hurt team performance. For each additional player in the last three months on contract, the win probability for that team falls by over 2.6%.
Keywords: career concerns, risk taking, gambling for resurrection, teamwork, injury, contracts, NBA
JEL Classification: M5, M12, G21, L83
Suggested Citation: Suggested Citation