Thursday, October 7, 2010

Incentives or Endogeneity?

Via MR and Barry Ritholtz:
It turns out that major league hitters on the verge of a 3 handle batting average — .300 — hit an astounding .463 on their last at bat of the season.

Why? I saw several explanations, but this seems the most plausible (from the MR comments):
If a .299 hitter gets a hit in his first AB of the last game of the season, his manager takes him out. If he makes an out, he stays in the game. If he goes 0-4, he finishes at .295 or so but doesn't count in the sample of how .299 batters do in their last AB.

Seems like Tyler's assignment of the phenomenon was a jump to conclusions by an economist looking under the light instead of looking where the keys were.

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