Tonight at the Caesars Forum Conference Center near Las Vegas, thousands of people will gather for an annual demonstration of human overconfidence.
The official name of the gathering is the N.F.L. draft. There, with millions of Americans watching on television, executives of the N.F.L.’s 32 teams will choose which college players to add to their rosters.
And the executives will almost certainly make a lot of decisions that they later regret.
I recognize that many readers of this newsletter are not football fans. Still, I think the draft is worth a few minutes of your attention, because it turns out to be a delightful case study of human hubris, one with lessons for other subjects, like the economy and Covid-19.
Fundamentally, N.F.L. teams tonight will be doing something that every employer does: choosing which workers to hire. A major difference is that the teams will have more information than most employers do. A hospital or manufacturer generally can’t study videotape and statistics documenting the record of job candidates.
Yet even with all this information, teams can do a miserable job of predicting who the best players will be. “The track record is pretty dismal,” Richard Thaler, a Nobel laureate in economics who has studied the draft, told me.
The confident Jets
Consider this chart, which shows the quarterbacks picked in the draft’s first round four years ago, alongside their career touchdown totals:
As you can see, there is little relationship between performance and draft order. Were the 2018 draft held again today, Josh Allen of the Buffalo Bills would almost certainly go first. Besides Allen and Lamar Jackson of the Baltimore Ravens, the other three might not even play much next season.
It’s a common story: Tom Brady, the most successful player in N.F.L. history, was the 199th pick in 2000. Most top quarterbacks today — including Patrick Mahomes, Aaron Rodgers, Justin Herbert, Dak Prescott and Russell Wilson — were drafted after quarterbacks who haven’t done as well.
(Related: When teams defy the conventional wisdom to make a surprise first-round pick, it rarely works out, an analysis by The Times’s Nate Cohn shows.)
Predicting performance is unavoidably hard, even in the country’s most popular form of mass entertainment, where executives can devote lavish resources to research. “There’s no crime in that,” Cade Massey, a University of Pennsylvania economist, said. “The crime is thinking you can predict it.”
The real mistake that the executives make is hubris. They believe that they can forecast the future and design draft strategies based on their confidence. In 2018, for example, the New York Jets traded away four picks for the right to move up only three spots in the draft — to the third pick from the sixth. With that third pick, the Jets executives thought that they would draft a quarterback so great that he would be gone by the sixth pick.
The quarterback they chose was Sam Darnold, who (as the chart above also shows) has been a disappointment. Imagine if the Jets had instead kept the sixth pick, taken Allen and also kept their other picks. It could have transformed the team.
The most successful N.F.L. teams have adopted a version of this anti-Jets strategy. They have embraced the power of humility. The Dallas Cowboys of the 1990s and New England Patriots built Super Bowl winners by exchanging high picks for a larger number of lower picks. In recent seasons, the Los Angeles Rams have exchanged early picks — whose value league executives tend to exaggerate, as a 2005 academic paper by Massey and Thaler showed — for established players.
With those players, the Rams won last season’s Super Bowl. The Jets failed to make the playoffs, for the 11th straight season.
What is the broader lesson here? The world is frequently messier and harder to understand than people acknowledge. We tell ourselves artificially tidy stories about why something happened and what will happen next.
The stock market rises or falls, and analysts proclaim a cause; in truth, they are often just guessing, as Paul Krugman, the economist and Times columnist, likes to point out.
On the subject of Covid, both experts and journalists have imagined it to be more predictable than it is. When schools reopened or certain states lifted mask mandates, you heard confident predictions that cases would rise. Often, they didn’t. The invisible, mysterious ebbs and flows of virus transmission overwhelmed every other factor.
In her latest column, The Times’s Zeynep Tufekci argues that public health officials have given flawed Covid guidance based on a paternalistic belief that they could see into the future. Zeynep’s main example is the F.D.A.’s refusal to allow young children to be vaccinated, based on what she calls a “five-dimensional chess” prediction that allowing childhood vaccinations will undermine vaccine confidence.
The most direct analogy to the N.F.L. draft is the hiring process elsewhere. Most employers still put a lot of weight on job interviews, believing that managers can accurately predict a candidate’s performance from a brief conversation. Research suggests otherwise.
Interviews can help people figure out whether they will like another person — which has some value — but not how effective that person will be at a job. If you think you’re a clairvoyant exception, you are probably making the same mistake the Jets did.
To be clear, the implication is not that nobody knows anything. Structured job interviews, which mimic the tasks that a job involves, can be helpful. And at the draft tonight, N.F.L. teams won’t be totally clueless: Higher draft picks have historically performed better than lower picks, but only somewhat.
The trouble is that human beings tend to overstate their ability to predict events. People who can resist that hubris — who can mix knowledge with humility — are often at a competitive advantage.
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Baby’s first Bitcoin
Through dance challenges and summer camps, kids as young as 3 are beginning to learn about cryptocurrency. But behind the cartoon characters, Amanda Hess asks, are the children being used to hype a tech bubble?
Crypto camps are popping up around the U.S., selling themselves as a way to prepare children for jobs in technology, Vox reported. One app encourages children to create videos, with an adult’s help, and rewards them with digital currency they can use to “invest” in unique digital assets called NFTs.
“Traditional children’s entertainment has long angled at extracting maximum cash from its little consumers,” Amanda writes. But, she adds, “the slick language suggesting that kids should spend money to make money feels new.”
For more: On “The Ezra Klein Show,” the essayist Dan Olson deflated the hype around NFTs.