Tuesday, April 01, 2008

An Economist's View of The Oilers Recent Success

*click on picture to read the font

The Economist's Argument
-The picks traded to Penner are a "sunk costs." Costs that have been incurred and which cannot be recovered to any significant degree.
-The Oilers, draft wise, are doing themselves harm by winning hockey games because they still own their 4th, 5th, 6th, and 7th round draft picks.
-So winning the draft lottery would have been the best case scenario for the Oilers, speaking from a draft standpoint, regardless of the fact Burke would pick at slots 1, 31, 61. Why? Because the Oilers would pick 91, 121, 151, 181 as opposed to the present slots of 102, 132, 162, 192.

The Typical Hockey Fan's Counter-Argument
-Emotionally speaking, it would be very difficult to face the fact the Oilers "sunk cost" would be lottery territory
-Winning now > higher draft picks, emotionally speaking
-Winning today is giving fans the reason for optimism next season.

This argument fits into the broader display of everyday hockey arguments consisting of Statistics/Objectivity/Economics/Science/ vs Emotion/Subjectivity/Human Element.

Arena debate, Whether to trade the likes of Smyth, Hemsky, Gagner (fan favourites), debate on the quality of Horcoff's play (Numbers vs Not very aesthetically pleasing to watch which influences perception).

So think. Think hard next time when you're debating. From what grounds are you arguing from? And do those grounds lead you to the best answer?

Follow-up Question:
Is there a hybrid form of line of reasoning?


YKOil said...

One could argue that the picks given Anaheim aren't a sunk cost. They are an, as yet unresolved, option on future values. Under this line of reasoning the draft acts like a stockmarket and each pick represents an existing, up-n-coming, company. Where the Oilers finish has a direct result on which company Anaheim gets a free, and measurable, investment in.

i.e. Does Anaheim get shares in a sure-fire pharmaceutical company that has a pill for treating obesity (Stamkos) or do they have to pick from shares in gold exploration companies (gold having less growth upside but you might get lucky)?

Admittedly this is as much a finance allegory as it is an economics 'best-choice' theoretical.

Since the Oilers are already picking out in the weeds (think automotive parts supply) and the chances of getting a winning stock are limited regardless, the ability to limit Anaheim's portfolio growth is important if the goal is to grow the best portfolio and the timeframe isn't limited to a single year.

And it is not.

I would argue that the marginal gain of limiting Anaheim's draft return is more important than the marginal gain of improving Edmonton's draft position given where the Edmonton draft.

Moreso given that Anaheim has the 1st, 2nd and 3rd picks.

Despite my interjection I do think it was a well argued posting PJO - thanks for it.

PunjabiOil said...

Very well written rebuttle. Enjoyed it.

And you do have strong points. i.e. time frame isn't limited to a single year.