7 Statistical Thinking
The book told the story how baseball team Oakland A with limited resources was able to win a disproportional number of games against teams with deep pockets. Baseball has been rich teams’ game. The team with most financial resources are able to buy the most talented players from the market place, or so they believe. Therefore rich teams enjoy a huge advantage over other teams with lesser resources. However, Oakland A seems to found the magic potion to disrupt that linear equation. Its general manager was able to identify top players whom other teams have missed and its money to winning ratio has been the highest.
The traditional approach to identify star players was largely based on experienced ex-player turned scouts who hold intuitive approaches to evaluate each player. The scouts travelled around the high schools and colleges to scoop star players. They believed what they see. Oakland A believed that eye can be deceiving rather it recruited a Harvard graduate who has little knowledge of baseball to do the same job. Its scouts were fuming at the unconventional approach. But the general manager insisted. The new approach has identified players whom would have been easily dismissed by the conventional scouts. Even Oakland A’s own team had doubted the approach. But Oakland A did what it believed was right. Eventually, Oakland A’s sensational success proved its point.
The book dealt in extensive detail about how Oakland A used the statistic approach to outwit other teams in the market. The statistic approach isn’t new. It has been proposed by enthusiasts but no one within the industry listened, except Oakland A. Besides the technical details, the book also told many intriguing personal stories, including Bill Beane, the GM of Oakland A. Bill Beane was unanimously recognized as an all-star player during high school. After years drifting in and out in the major league, he didn’t make to the big guy he was expected to. He lacked something that was not noticed by the scouts. On the other hand, Jason Giambi was much less a star player in an ordinary eye but nonetheless became one of the greatest players in the field.
The book has got a plethora of terminologies that can easily make a non-baseball fan dizzy: slugging, single, on base percentage were sounded like a foreign language. But once I have wikied the basics of the game, the book became a smooth read. It is very insightful and shows how fragile and flawed our intuitive system was. It was pointed out by Michael J. Mauboussin that high IQ does not guarantee rational thinking. Due to the inherent biological structure, it is very hard not to fall in the trap of cognitive biases. In an ever evolving, dynamic environment, there bond to be new inefficiencies emerge somewhere in the market, then who will be the next Bill Beane?