One of my all-time favorite movies is the 1988 film Bull Durham, starring Kevin Costner, Susan Sarandon, and Tim Robbins. Costner plays "Crash" Davis, a veteran minor league catcher who is brought in to teach a rookie and potential star pitcher named Ebby Calvin "Nuke" Laloosh (played by Robbins). Sarandon plays a baseball groupie named Annie Savoy, who finds herself in a love triangle with the other two characters. There's a famous scene in which Crash tells Annie that he believes there should be "a Constitutional Amendment outlawing astro turf and the designated hitter." It's just one great scene in a movie that has a lot of them.
For those of you who don't follow baseball, the American League changed the rules in order to have a Designated Hitter (DH) so that the pitcher never was in the batting line-up. The National League made the pitcher bat, which created a lot of different opportunities for managers to move players around in the batting order during games and in my opinion added a whole different strategic element to the game. Baseball purists used to argue about whether both leagues should adopt the so-called "Designated Hitter Rule", which was adopted by the American League (AL) in 1973. The National League (NL) adopted the rule in 2022, so all of the arguments among purists are moot at this point.
I came across a very interesting article in the Boston Law Review on the "Designated Hitter Rule" that directly relates to all of my recent posts covering some very introductory concepts in game theory. Dustin Buehler and Steve Calandrillo suggested that because AL pitchers do not bat, they are not deterred by throwing an inside pitch (throwing the ball as close to the batter as possible, which makes it more difficult to hit but also increases the chance that the ball will hit the batter). Whether it's right or wrong, when a batter is hit by a pitch, that batter's pitcher will often seek retribution by throwing a ball at the other team's batters in the next inning. As it turns out, John Charles Bradbury and Douglas Drinen compared the number of times that a pitcher hits an opposing team's batter (either intentionally or not) in a study published in the journal Economic Inquiry between the AL and NL. They found that (1) pitchers in the AL hit opposing batters more often than in the NL (note that this study was conducted before the National League adopted the "Designated Hitter Rule") and (2) the deterrent effect of requiring NL pitchers to bat explained between 60-80% of the difference!
If you are familiar with economics and game theory, you might have recognized what's going on here - it's called moral hazard. The concept is related to the "Tragedy of the Commons" and the "Free Rider Problem" that I talked about in my last two posts. Basically, "moral hazard" is the risk that individuals, groups, or organizations take (often incorrectly) because they do not bear the full cost of that risk. For example, AL pitchers are more likely to hit opposing batters because they never have to step in the batter's box themselves.
There are a number of examples of moral hazard. Laws that are intended to improve traffic safety, such as mandatory seat belt laws and speed limits, may actually increase risky driving behaviors. American football players lead with their helmets more often when tackling because they subjectively feel like the helmet will protect them from injury. Notably, some studies have shown that head injuries are less common in Australian Rules football or rugby, both sports where helmets are either not routinely worn (admittedly, these studies are somewhat controversial and additional research suggests that head injuries may be just as common in these two sports as they are in football). Having flood insurance or earthquake insurance actually increases the chance that individuals will purchase homes in flood zones and earthquake-prone areas!
Importantly, as I have previously mentioned, game theory often assumes (wrongly) that individuals will make their decisions logically and rationally. The examples that I have provided from the last few posts suggest otherwise. When analyzing a game, it's important to take into account not only your preferences, strategies, and potential pay-offs, but it's also important to take into account the opposing player's preferences, strategies, and potential pay-offs. However, it's even more important to place yourself in their position and analyze the game from the opposing player's perspective. And remember, not everyone will act rationally! Remember the lessons of the "Tragedy of the Commons", the "Free Rider Problem, and moral hazard.
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