The Cost of Letting Matt Flynn Go: The Endowment Effect

Seattle Seahawk Matt Flynn

Possibly the worst photoshop job on a NFL player ever

So who thinks Matt Flynn should have been franchised now?  I will be the first to admit that in my heart, I desperately wanted Flynn to be tagged and traded, and maybe while I’m dreaming some idiot team like the Raiders would offer a first rounder.  My head of course said otherwise, sure the potential reward is high, but so was the risk; what would happen if the Packers were stuck with a $14 million guaranteed check?

In the end, general manager Ted Thompson was right in letting Flynn go without a fight and Flynn signed a very conservative 3-year $26 million deal with $10 million guaranteed with the Seattle Seahawks.  More money that you or I will probably make in a lifetime, but loose change in comparison to the 5-year $90 million contract Peyton Manning just signed, or even the 5-year $60 million contract that Kevin Kolb signed last year.

My question is why fan perception of a player so different from a NFL GM?  Even the media, which presumably has a better idea of what NFL GMs are thinking are still more like fans when it comes to predicting player value (although this might have to do with the fact that the media caters to fans and not to NFL GMs, so they could be deliberately doing this).  Answer, the endowment effect.

Simply put, the endowment effect is the theory that there is a difference between the price of buying and selling a good when you own that good.  A more academic explanation would be that:  “This effect is a manifestation of “loss aversion”, the generalization that losses are weighted substantially more than objectively commensurate gains in the evaluation of prospects and trades (Kahneman and Tversky 1979; Tversky and Kahneman, in press).  An implication of this asymmetry is that if a good is evaluated as a loss when it is given up and as a gain when it is acquired, loss aversion will, on average, induce a higher dollar value for owners than for potential buyers, reducing the set of mutually acceptable trades” – Experimental Tests of the Endowment Effect and the Coase Theorem, Kahneman et al. 1990



2011 NFL Preseason Week 2: Packers – Cardinals Preview: The Champs Are Back Home

It’s hard to believe, but going back to last season the Green Bay Packers have played five consecutive games away from the hallowed ground of Lambeau Field.  The last time the Packers played in front of the home crowd was the week 17 win over the Chicago Bears that catapulted the Packers into the playoffs and on the track to football immortality.

Today, the champions return home.

The Green Bay Packers tonight play their second exhibition game against the Arizona Cardinals.  Who cares that it is a preseason game?  For the first time, the Packers take the field at Lambeau as defending world champions.  It will indeed be a special moment even if the game truly doesn’t count

That said, enough with the nostalgia. Let’s talk some football.

With a very deep roster, the Packers enter the game hoping to further mold their depth chart for the season opener against the New Orleans.  The starters currently locked into the lineup (Rodgers, Finley, Jennings et al) should see more action than they did in Cleveland so I would not be surprised to see them finish out the first quarter, if not less.  The last thing the Packers need is more injuries.

The Cardinals on the other hand are in a different situation.  They are still kicking the tires on newly acquired starting quarterback Kevin Kolb as well as different players on the defensive side of the ball.

Let’s look at the Red Birds.

Breaking down the Cardinals.

I wouldn’t be surprised if Kolb is a mixed of terrified and energized going into this game.  This is the same defense that concussed him in Week 1 of 2010 and opened the door for Michael Vick’s resurgence while slamming shut Kolb’s chances at being “the guy” in Philadelphia.  Revenge could very well be on the quarterback’s mind tonight.

The big weapon in the Cardinals offense remains wide receiver Larry Fitzgerald.  Since he is entering the final year of his contract, Fitzgerald has a lot on the line this season.  He quickly needs to develop chemistry with Kolb for the offense to have any kind of explosive ability.

Also noteworthy is the return of former Packers offensive lineman Daryn Colledge to Lambeau.  Colledge made headlines this week with his remarks about not being invited along with the rest of the Packers during their visit last week to the White House to meet President Obama.