Case Study: Overcoming Professional
Basketballs Commons Dilemma
In Choice and Consequences1 Schelling discusses the incompatibility between rationality that focuses on individual incentives to maximize personal benefits and the collective rationality that causes people to make sacrifices that are beneficial to the group as a whole. He wrote of when people pursue self-interest, saying, “In these situations people are individually motivated to behave in such ways that they all could have been better if they had behaved differently.”2 One institution where this conflict between individual incentives and group outcomes takes place in a very public forum is professional basketball. Professional basketball teams in the National Basketball Association, the NBA, can be seen as individual commons, or multiperson prisoner’s dilemmas. It is rational for players to act in their own personal interests but better for their teams if they cooperate. This is the “tragedy of the commons,” or the commons dilemma.
This conflict has been analyzed by academic studies and in the press. One study looked at the individual contracts of every player in the NBA for a period of fifteen years and also the corresponding yearly statistics for each player, such as average points scored, rebounds, assists, and steals.3 The conclusion from comparing the data was that in the year before a new contract was signed, players improved their performance in efforts to earn new more lucrative long-run contracts. Having signed their contracts, however, the players’ overall performance declined, indicating that the incentive motivating improved play during contract years is self-interest. The study also noted individual performance incentives, and professional contracts are laden with them.
Individual performance incentives can promote team play, such as bonuses for making playoffs or winning the NBA title. However, incentives that can indicate success may promote individual self-interest. These latter performance incentives include such things as selection for the all-star team, number of points scored, most valuable player award. The value of winning special recognition was noted in research on professional sports that commented, “Most players in the highest professional leagues are well known to the public but only when they achieve star status their marketing value increases notably.”4 A recent study concerned how three