Dave, your tweet about whether Girardi would have done it the other way around if A-Rod had started was a perfect demonstration of the endowment effect, a key concept in behavioral economics (think Freakonomics/Gladwell). Basically, we make irrational decisions based on what we have in our hands, regardless of low transaction costs. Put it another way: intertia.
Anyway, Girardi’s decision — or lack there-of — was foolish but in lots of company.
Dave, your tweet about whether Girardi would have done it the other way around if A-Rod had started was a perfect demonstration of the endowment effect, a key concept in behavioral economics (think Freakonomics/Gladwell). Basically, we make irrational decisions based on what we have in our hands, regardless of low transaction costs. Put it another way: intertia.
Anyway, Girardi’s decision — or lack there-of — was foolish but in lots of company.