Information Cascade in sports drafts
A sports draft is an excellent illustration of a circumstance in which an information cascade can happen. Teams choose players in order, with other teams watching each selection. The essential conclusion is that organizations learn from teams who choose earlier in the draft. The draft night phenomenon of a player dropping is explained by the “information cascade” notion.
The availability bias and the negativity bias are two examples of cognitive biases that are important to sports. When doing an evaluation, the availability bias is an inclination to rely on easily accessible or available evidence. This might lead to a player’s performance in the NFL draft being judged based on the performance of another player with similar attributes or characteristics. When a team examines Justin Fields, do they consider his previous high-profile performance?
Justin Fields was often projected as the second quarterback to be selected. However, Zach Wilson quickly rose to an almost consensus number 2.
The 49ers traded up to the number 3 slot in the draft. However, rather than projecting Justin Fields to the 49ers, most analysts expect the selection to be Mac Jones.
Fields now seems to be competing with Trey Lance to be the 4th quarterback.
I have seen Justin Fields projected as falling to the 15th pick in the draft.
Suppose the next team, the 49ers, observes this drop and includes this “new information” in their evaluation. Perhaps the “red flag” of the Jets passing combined with the 49ers evaluations’ of Fields and Jones results in Jones becoming the pick. Two teams have passed on Fields, and other teams start to infer that there is some unknown negative info associated with Fields. The cascade begins. With each team that passes on Fields, the concerns grow. And maybe Fields is the fifth quarterback selected. At this point, we are only talking about projections. Perhaps Fields goes at pick number 2, and it was all a series of bluffs. Or maybe, Fields becomes the story of the falling player, and ESPN spends the evening zooming in on an increasingly frustrated Fields and family.