Six Decision-Making Lessons From The World Cup

Departing from my usual structure of analyzing a single topic I thought I’d illustrate decision making lessons with examples from the World Cup.

Firstly, regression to the mean is commonly not recognized. Spain had a very disappointing start to the tournament in their first two games. Their third game was always likely to be a lot better. Some might associate the improvement with a stiff talking to from the manager but that seems unlikely. Spain are (still) a talented team and after a bad performance the next is simply likely to be better (closer to an average performance).

Secondly the Hot Hand. People often read too much into short sequences of random events. Wayne Rooney had not scored in the World Cup prior to this year. This led some to argue for him to be dropped. Long term Rooney has shown he is England’s best player. (Admittedly not as praiseworthy a feat as I’d wish).  It would have been wrong to read too much into his short sequence of not scoring.

People love to stereotype, for instance describing the Germans as naturally efficient. For almost anything that occurs at the World Cup there is an explanation based upon cultural stereotypes that is a jolly good story but untestable and often poorly theorized. When a team is under pressure the good news is that their level of “individualism” can explain all outcomes. Either they are successful because individualism helped them thrive under the spotlight or they fail because they lacked collective spirit. Such explanations aren’t convincing to me.

The World Cup is a giant exercise in proving that people care about more than their own financial self interest. I supported England despite never expecting any cut of the prize money. Furthermore, fans even often support “second” teams — “I went to Costa Rica on holiday and everyone was very friendly”, “it’d be nice to see an African team win”. People care about what happens to others. Interestingly these non-selfish motives aren’t always “nice” — a Dutch supporter cheering against the Germans.

Nostalgia is a huge part of the World Cup. West Ham websites are covered with stories of the West Ham players who formed the core of the England team which won the 1966 World Cup. This means a lot to the readers despite the fact that this event happened long before most fans were born.

Finally, watching the World Cup shows that people don’t always choose optimally. I can’t believe upon second thought that even Luis Suarez believes biting people is a brilliant strategy.