MONEYBALL: OPTIMIZING FOR INNOVATION
The 2002 Oakland A’s should have been doomed. The A’s had a $40 million budget to compete not only with the $125 million payroll of the Yankees but against 28 other teams with average payrolls approaching $70 million. As A’s General Manager Billy Beane (Brad Pitt) puts it in the movie (and I’m paraphrasing from memory), “There’s rich teams, there’s poor teams, there’s 50 feet of crap, and then there’s us.” It was an unfair game. Beane informed his staff that if they were going to play like the Yankees off the field when finding talent, then they would be losing to them on the field.
The only way the A’s could win in a world like this was to innovate by finding new knowledge about how to win. Beane turns to Peter Brand (Jonah Hill), an economics major from Yale who was not entrenched in old-school baseball mentality. (The fictional character Brand is based on Paul DePodesta, a Harvard economics major.) According to Brand, current baseball thinking was medieval; beliefs about player value were shaped by biases that caused players to be misvalued. This market inefficiency would allow the A’s to field a competitive team within their budget by buying wins for less.
Using statistical analysis and ideas popularized by sabermetrician Bill James but largely ignored by baseball insiders, the A’s found good players they could afford. They turned to three seemingly flawed players—Scott Hatteberg ...