The $999,999 question
What time do you set your alarm in the morning? The odds are it’s a round number; 6.15am rather than 6.12am, for example.
This simple decision is relatively inconsequential, for a minute here or there isn’t going to make you late for work. But analysing historical football transfers suggests that round numbers can play an important part in influencing some of the biggest decisions ever made in the game.
The chart below summarises the 100 most expensive transfers of all time by the age of the player when bought. The majority of players in this subset were bought aged 23-27, with a reasonable proportion of players either side of this age group.
A curious thing happens when a player hits 30, though. 10 of the most expensive signings ever made have been of players aged 28 or 29, but only one player in this subset was bought after his 30th birthday – the 31-year-old Gabriel Batistuta in 2000. This is a severe drop-off, no doubt influenced by the fact that it is much easier to convince ourselves of the value of a deal when a key characteristic falls just below a significant number.
A couple of weeks ago, we suggested that rationally this drop-off should be at most around 26 or 27 years old. Whilst there is some evidence above that clubs sometimes obey this rule, it’s a round number – 30 – that has a powerful role in these decisions. The signing of some high-profile 29-year-olds, including Andriy Shevchenko and Robin van Persie, was perhaps perceived to be disproportionately more justifiable given they were on the right side of 30.
Similarly, batters in baseball are known to behave very differently when just below a .300 average, compared to those just on or above this mystical round number. There is a notable difference in financial rewards offered by teams for these otherwise comparable players, too.
You may be thinking what record-breaking transfers and baseball statistics have to do with you. The reason is simple: December and January is a time of key decisions, both in the transfer window and often in contract renegotiations.
It’s therefore worth thinking: would we be planning to spend as much money on new players if we were just outside the relegation zone, rather than just inside? Would the new salary we’ve offered our star player be as high if he had scored 19 goals, instead of 20? Is a player perceived as lower cost because his salary is £9900 a week, rather than £10,000?
Round numbers bring comfort and understanding, but in a busy time of year they can act as tiny bacteria to turn an entire process rotten. Objective decision making is hard; it’s even harder when we have to compete with our own biases.