The Surprising Truth About What Motivates Us

Kudos to Brian Hull at RI Future for finding this great animation created by the RSA.  Monetary incentives aren’t always the best motivators, according to Economists from the University of Chicago, M.I.T, and Carnegie Mellon, bastions of conservative, capitalist economics.  Of course, market-driven decisions dominate the business world’s preferred risk management and regulation mindset.

Not All Bad Calls Are The Same

Last night, after a lovely birthday dinner at Salvation Café in Newport, I turned on the MLB Network to see some random baseball games before going to bed.  I tuned in while the network was covering the ninth inning of a game between the Detroit Tigers and Cleveland Indians, where Tigers pitcher Armando Galarraga was three outs away from a perfect game.  Now, for those uneducated in baseball, a perfect game is one of the most rare occurrences, when a pitcher records all 27 (or more) outs, without allowing a hit or a walk.  Prior to the 2010 season, it had happened only 18 times in the 135 years of baseball history.

Last night, as Galarraga was set to join a distinguished club that includes Cy Young, Sandy Koufax, and Catfish Hunter.  With one out, Austin Jackson made a behind-the-back catch in centerfield reminiscent of Willie Mays, and the perfect game seemed destined.  Unfortunately, Umpire Jim Joyce made a bad call on what should have been the third out, a groundout to the first baseman.  As you can see on the highlight above, the throw from the first baseman to the pitcher beat the runner. Joyce, regarded by many in baseball as one of the best umpires, including Curt Schilling, simply missed the call.  Because of the impact of this bad call, critics are calling for increased use of instant replay in the game.  Human judgment in this case robbed a promising young pitcher of a place in the record books.

Of course, Joyce apologized to Galarraga after the game:

“I just cost that kid a perfect game,” Joyce told reporters in Detroit. “I thought he beat the throw. I was convinced he beat the throw, until I saw the replay. It was the biggest call of my career.”  Galarraga told reporters that Joyce apologized to him after the game, adding that he had no instinct to argue the call. “He probably felt more bad than me,” Galarraga said. Smiling, he added, “Nobody’s perfect.”

Joyce considered this the biggest call of his career.  Now, this is only baseball, and while Detroit fans do not deserve one more serving of heartbreak, this is a lapse in judgment with little real effect.

What about the oil experts at British Petroleum?  Days before the blast on the Deepwater Horizon, they opted for the cheaper cement casing, which provided only a single layer of protection to prevent gas from leaking into the well:

‘Workers on the rig and from BP have said that gas bubbled into the well and was a key factor in causing the April 20 blowout, which killed 11 people.  BP described the approach to finishing the well as the “best economic case” in the document, which has appeared following Congressional hearings into the cause of the accident. News of the decision emerged as Douglas H. Brown, chief mechanic on the Deepwater Horizon rig, testified yesterday that a disagreement took place on the rig between one of the six BP engineers overseeing the operation and employees of Transocean, the owner of the rig, just a few hours before the blast took place.  Mr. Brown told the hearing that the “skirmish” followed BP’s decision to withdraw heavy drilling mud from the well that was helping to control pressure inside it and to replace it with lighter saltwater before the well was capped with a final dollop of cement.  “Well, this is how it’s going to be,” the BP official said, according to Mr. Brown.’

On the Deepwater Horizon, human judgment cost the lives of 11 rig workers, and the ongoing devastation of the Gulf of Mexico.  No human is perfect, that is for sure.  However, when the decisions of humans can have the huge impact that those of BP did, can we rely on market forces to ensure that caution and restraint are part of the decision making process?  Unfortunately, instant replay cannot take us back to the days before the explosion, and BP’s call cannot be reversed.