The Hidden Influences Behind How Sports are Played and Games are Won

Myron Scholes Global Markets Forum

February 16, 2011, 5:30–7 p.m., Gleacher Center

At Chicago Booth, we know that just because people say something or believe it doesn’t make it so. We look at both theory and data to gain insight that either confirms or challenges existing thinking. In a business school, we do this mostly in the context of economics, along with finance, marketing, accounting, and basic business practices. But this approach—and the curiosity that it takes to turn something over on its head, look at it a little differently, and apply rigorous analysis—can lead to novel discoveries in other contexts too. By taking the Chicago Approach with everyday debates about sports, professor Tobias Moskowitz, who is a director of the Initiative on Global Markets, delivers insights into both the world of sports and the world of business.

Everybody talks about the home field advantage, for example. But do home teams really win more than their fair share of games? Yes … but: conventional explanations, such as the role of the crowd, better knowledge of the home field, or the rigors of traveling do not account for the advantage. Rigorous analysis yields insights into the real reasons why home field advantage exists in all sports: the answer will surprise you.

Professor Moskowitz described how some of the same hidden influences that help to determine the outcome of sporting events are also present in business. His insights stem from research for a recently published book, Scorecasting, in which he teamed up with veteran Sports Illustrated writer L. Jon Wertheim to overturn some of the most cherished truisms of sports and reveal the hidden forces that shape how basketball, baseball, football, and hockey games are played, won, and lost.

This event was part of the Initiative on Global Markets (IGM) and is generously sponsored by Myron Scholes.

Speaker Profiles


Tobias Moskowitz, who joined the faculty in 1998, studies asset pricing, portfolio choice, risk sharing, market efficiency, real estate markets and finance, and empirical corporate finance. He has explored topics as diverse as momentum in stock returns, local bias in investment portfolio choice, and the social effects of bank mergers. He also looked at the return to private business ownership, the trading and financing of commercial real estate, and the political economy of financial regulation.

Moskowitz was recognized by the American Finance Association with its 2007 Fischer Black Prize, which honors the top finance scholar under the age of 40. The award cited his “ingenious and careful use of newly available data to address fundamental questions in finance.”

His article, “Home Bias at Home: Local Equity Preference in Domestic Portfolios,” written in 1999 with Joshua Coval, won him the 2000 Smith-Breeden Award for the best paper published in the Journal of Finance. More recently, he won the Barclays Global Investors Michael Brennan Award in 2004 and 2005 for the best paper published in the Review of Financial Studies for his papers entitled “Informal Financial Networks: Theory and Evidence,” written in 2003 with Mark Garmaise, and “Confronting Information Asymmetries: Evidence from Real Estate Markets,” written in 2004 with Mark Garmaise. He also won the 2006 Brattle Prize for a distinguished paper published in the Journal of Finance, “Testing Agency Theory with Entrepreneur Effort and Wealth,” written in 2005 with Annette Vissing-Jorgensen and Marianne Bitler.

Always trying to bring his professional experiences into the classroom, Moskowitz observes that the gap between theory and practice is not as wide as people think. “It’s always interesting to try to understand why,” he says, “and I get my students to think about these issues.”

Moskowitz serves as a research associate for the National Bureau of Economic Research and is a current editor of the Review of Financial Studies. His work has been cited in the Wall Street Journal, New York Times, US News & World Report, Money magazine, and a 2005 speech by former Federal Reserve Chairman Alan Greenspan.

Moskowitz earned a bachelor’s degree in industrial management and industrial engineering in 1993 from Purdue University. He went on to earn a master’s degree in management from Purdue University the following year, before earning a PhD in finance from the University of California at Los Angeles in 1998.

His interests outside of the classroom include wine, most sports, and South Park.