Posted: 17 May 2006
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.
Suggested Citation: Suggested Citation
Romer, David H., Do Firms Maximize? Evidence from Professional Football. Journal of Political Economy, Vol. 114, pp. 340-365, April 2006. Available at SSRN: https://ssrn.com/abstract=901848