Risk and uncertainty in team building: Evidence from a professional basketball market

Martin Schmidt

Journal of Economic Behavior & Organization, 2021, vol. 186, issue C, 735-753

Abstract: While recent surveys suggest that team oriented production has become commonplace within the production process, its impact on worker productivity is less clear. Both the theoretical and empirical literature highlight the disparate effects working in teams may have worker productivities. The present paper investigates how well management is able to internalize these uncertain effects. Using National Basketball Association game-by-game data over 36 seasons, we estimate each team’s ex-post labor portfolio and find that, beginning in the mid-1990s, NBA teams are able to reduce their portfolio’s performance risk. Further the timing of the reduction coincides with the rise in basketball analytics.

Keywords: Expected return; Uncertainty; Portfolio; Team production; Peer effects; National basketball association (search for similar items in EconPapers)
JEL-codes: D22 G11 L23 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:186:y:2021:i:c:p:735-753

DOI: 10.1016/j.jebo.2020.11.001

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