November 8, 2011
A New York University point guard has some advice, informed by game theory, for his NBA brethren as a way to end the league’s impasse—give the game’s lesser-known players a bigger voice in the negotiations, which will pave the way for an agreement with ownership.
As Zeve Sanderson sees it, neither the league’s elite players nor the NBA owners have any reason to compromise—many top players can skip the NBA season, head to Europe to play, and live off their endorsement money while the owners, who say they can’t make enough money with a revenue split proposed by the players, can fill their arenas with non-NBA events this winter and spring.
However, the league’s lesser lights don’t have such a safety net—a circumstance that may hold the key to a resolution.
“The run-of-the-mill players are in a markedly different position than the stars are,” Sanderson contends, noting the big endorsement deals and European contracts are limited to the NBA’s elite. “The most competitive league in Europe, the Euroleague, only allows two Americans per team. Can we really see JJ Reddick draining threes in a second-tier league in Lithuania? Or how about Shannon Brown taking his acrobatics to Iceland? And in many European leagues, they won’t sign a player with an existing contract. For most players, it’s the NBA or bust.”
Sanderson’s conclusions are drawn from game theory, which establishes matrices to map out bargaining situations. An examination of this negotiating architecture can often shed light on solutions that benefit both parties.
“In just about any situation, game theory tries to show which strategy is most effective to reach a goal,” observes Sanderson, a sophomore from Los Angeles.
In the case of the NBA impasse, both players and owners have adopted a “no compromise” position. But not every player benefits equally from the “no compromise” stance, so failure to move from this bargaining posture will eventually hurt some more than others.
“Though we shouldn’t feel sorry for any of the players making the league average of around $5 million dollars a year, they will be hurt more by the lockout than, let’s say, Kobe or Lebron will,” Sanderson adds. “Since the average players have much more to lose than the other two parties, they are going to need to push the players' position from a position of ‘don't compromise’ to ‘compromise’.
Sanderson, who is inspired by former U.S. Senator Bill Bradley, concludes game theory helped end the NFL lockout—but through a different route.
“For both the players and the owners, there were two options: ‘compromise’ or ‘don’t compromise’,” he writes. “If neither side caved, the season would have been cancelled and nobody would have made any money: everybody’s worst outcome. If one side compromised and the other didn’t, the season would have been played, but the side that compromised would have emerged from negotiations a big loser and the other side a big winner.”
The players and ownership came to an agreement that allowed for a win-win solution.
“Veteran players lowered rookie salaries and got more money for themselves,” Sanderson writes, adding this year’s rookie players had no vote in the labor dispute. “In return, the owners increased the minimum salary and yet, by paying rookies less, saved money.”
Sanderson wrote the paper, “Can Game Theory Save Basketball?” for an NYU course taught by Steven Brams—“Games, Strategy, and Politics.”
Brams, a professor in NYU’s Wilf Family Department of Politics, is the author of Game Theory and the Humanities: Bridging Two Worlds (MIT Press, 2011) and Mathematics and Democracy: Designing Better Voting and Fair-Division Procedures (2008), among other works.
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