SEQUENTIAL JUDGMENT EFFECTS IN THE WORKPLACE: EVIDENCE FROM THE NATIONAL BASKETBALL ASSOCIATION

I. INTRODUCTION Many areas of economic activity involve an evaluator who must make subjective judgments. Often these judgments are made sequentially toward different individuals, with the intent that each judgment be made independently. Business managers complete annual evaluations regarding employee performance, raises, and promotions. Judges score gymnasts as they compete in a sequence and boxers as they fight round-by-round. Referees call fouls and violations as they occur play-by-play throughout a match. Might these economic agents be affected by the sequential nature of their decisions? For instance, might a tough raise or promotion decision between two subordinates this year affect a manager's evaluation of either or both the next year? I study this aspect of decision-making using data on the offensive foul and violation decisions of National Basketball Association (NBA) referees. These calls always result in a turnover and loss of possession. Thus, when a tough call is made on one team, a referee crew may consciously or subconsciously increase scrutiny on the opposing team, potentially returning possession to the originally aggrieved team. This situation contains the anecdotally popular sequential judgment known as the "make-up call," but I do not claim to explicitly study make-up calls as the quality of each call is not known. However, if make-up calls exist, they would likely reveal themselves in this situation. Identification is achieved by exploiting the fact that some offensive fouls and violations regularly involve substantial referee judgment while others do not. For example, charging and traveling calls can be relatively subjective, allowing room for referee discretion, while very little judgment is required when a player steps out of bounds or passes the ball out of bounds. There is scope for referee decisions to be sequentially biased following more subjective calls that should not exist following more objective calls. Using three assumptions, I examine referee decisions following both types of calls. Relatively objective calls serve in a control capacity to test for equilibrium changes in player behavior. If player behavior hypotheses are rejected, sequential bias among referee decisions will be identified. The behavioral concept of changing one's scrutiny of others following a tough decision is not unique to sports. It can apply to professor grading decisions, supervisor promotion decisions, voter award decisions (e.g., Oscars, Grammys, Most Valuable Player awards), police investigative decisions, and so on. The sports world happens to be an excellent setting to empirically investigate these situations because of the wide availability of clean and precise data on actual decisions and because such allegations toward referees are quite common in a number of sports. These may involve the judgment calls of pass interference or roughing the passer in football, strikes and balls in baseball, cross-checking or two-man advantages in hockey, red/yellow cards or offside in soccer, point deductions in boxing, and offensive fouls and violations in basketball. Prior research provides some supporting evidence of sequential bias. Plessner and Betsch (2001) conduct an experimental study of videotaped scenes of potential penalties from soccer matches. They find a negative correlation between participants' successive penalty decisions regarding the same team and a positive correlation between successive penalty decisions regarding opposing teams. Damisch, Mussweiler, and Plessner (2006) study actual gymnastics scores from the 2004 Olympics and find that evaluations of consecutively performing gymnasts are correlated in a positive way (an assimilation effect). However, Morgan and Rotthoff (2012) examine gymnastics scores at the 2009 World Artistic Gymnastics Championships and find no evidence that a previous gymnast's score affects the score of the next gymnast. In nonsports contexts, assimilation effects have been found by Page and Page (2010) in rankings of sequential performances in the Idol singing competition and by Attali (2011) in sequential grading of essays in standardized tests. …