Monty Williams’ Loss Aversion May Be Causing Losses

Published: January 8, 2015

As part of my resolution to expand my so-called game here on the site, I’m going to try to talk a little more about the on-court play of the New Orleans Pelicans.

Right now seems the perfect time to talk about losses and why they happen, or at least one reason. The team just dropped a seemingly very winnable game the now 13-24 Charlotte Hornets, leaving the Pelicans at 17-18. Losses will happen, even against short-handed teams in the East, but it’s time to take a look.

The other day, I ran across this quote from Monty Williams that Jimmy Smith of the Times-Picayune had in his article on Asik’s pro-Spurs tip in:

“We had the game won in overtime,” Williams said, “and get beat on a backdoor play we’ve seen San Antonio run for 20 years.”

Yet Williams admitted he has replayed the sequence repeatedly since Wednesday night, wondering whether he should have told Davis to get closer to Diaw’s inbounds pass, or switching Asik and Davis, who has better leaping ability than Asik.

“You can sit there and try to figure out all the stuff you want to,” Williams said. “We had a chance to bat the ball away and that’s all you can ask for. I wish I had mulligans on every play.

“I’m always looking at ways where I can keep my players out of positions where they fail or things don’t go well. But you can’t live in second-guessing. That, to me, is the last thing you want to do as a head coach. You’ve got to think about it for a while and move on.”

It’s the last bit that interests me here. I give the full context so you can see how it came out. It was not a response to a question about a coaching philosophy. Rather, it was a question how the game was won and lost that Coach answered first. When asked about the could-have / should-have of it all, he side-stepped in the same way every coach worth his salt would, which is to say something along the lines of, “We had as good a chance as we could get, but it did not work out.” Process v Results.

Then, having answered the question, he continued to talk about something pretty specific to his thinking, and something that runs counter to the paragraph before. This, to me, actually seems like a moment of candor, as opposed to the party line, a throw away line from the book of coachspeak, or the guarded conversations normally have (and rightly so) with the media. He goes from reacting to the question about how the situation could have been avoided by pretty much saying “don’t do that” to saying “I do that.” Let’s read just that bit again:

“I’m always looking at ways where I can keep my players out of positions where they fail or things don’t go well. But you can’t live in second-guessing. That, to me, is the last thing you want to do as a head coach. You’ve got to think about it for a while and move on.”

The phrasing choice here could be arbitrary or unintentionally misleading. He could be saying that it is his job to question plays and not that of the media (“Stay in your lane, media!”). He could have just talked mistakes for some random reason instead of mentioning successes.

What Coach says, however, is that he is trying to avoid mistakes. As I pondered this unprompted pseudo-non-sequitur, it occurred to me that Monty may have the human, all too human malady of Loss Aversion.

Loss Aversion is a psychological / economic concept that explains certain decisions people make. In short, on average, the influence of a potential loss is about twice as powerful as the influence of a potential gain of equal size.

Example: You are walking around the Quarter with $100 in your pocket. You can play a game offered by a street merchant. In this game you can pay $1 and flip a coin. If the coin comes up heads, you get your $1 back plus some. If you lose, the vendor keeps the $1. You have every reason to suspect he game is not rigged, and you can only play once, per the rules of the merchant.

Unless that “plus some” is something like a dollar or more, many people will not play that game, a game that actually, in the long run, will bankrupt the vendor just through net payouts. Purely mathematically, the payout just has to be $1 to make the game fair and anything extra actually favors the the player, not the merchant. Data supports the decision-making is in line with loss aversion, and that people choose to play only if the payoff is a bit higher than the loss, again, around twice as much. Additionally, this is not a “make it worth my time” thing. It’s about the aversion to loss.

To be perfectly clear: This is irrational for the most part. Arguments can be constructed in certain situations that Loss Aversion is the proper mode of decision-making, such as if you only have $1 rather than $100 in the example above. In the large, it’s irrational. The irrationality just means that factors outside of the pure wins, losses, and probabilities enter into the decision-making. It does not mean insane or stupid. Love is irrational. Caring for a child or a pet is irrational. Following your sports team is likely irrational.

Not bad.


I could go on for thousands of words here, but I won’t. I’ll save them for many more articles.

I will, however, give a couple of pieces of evidence / analysis for you to ponder yourselves, discuss, or counter-argue.

  • Coach has been known not to give players, particularly young players, much time after making a mistake. This could very well be a rational Loss Aversion instance, since a developing player could react very negatively to being thoroughly outplayed by being placed in a situation that they are just not capable (at the time) of succeeding. Similarly, we’ve seen worse veteran players get minutes over younger players who we not known commodities but had upside.
  • The Pelicans’ slow pace of play and long waits before initiating the offense can both be explained in terms of Loss Aversion. Slower pace can be viewed as attempting to have fewer possessions for each team. This limits mistakes by limiting opportunities. Additionally, by setting and observing, one could conclude that offense will be less likely to be tricked into a disastrous action. They may not be able to capitalize on the mistakes of the defense, but that is viewed as worth the cost (clearly, since this is what happens). Going back to pace, if you lessen the number of possessions for your opponent, you lessen the number of opportunities they have to score. This comes at the expense possessions for your own team to score, of course. Again, this is trading upside for avoiding loss (here, an opponent scoring). This could very well also explain the 2-for-1 choices the team makes. Taking a quick possession if you get a good look, leaving the opponent a full shot clock, then having a shot clock of left to get a good look is going 2-for-1. Not going 2-for-1 can be explained in terms of loss aversion by trying to not leave the opponent a full shot clock with which to work.
  • Coach does not like to take a timeout when the Pelicans are in a potential game-winning situation and gain possession while the opposing team has their offensively minded players in the game. The audio here (start at about 1:20, and the relevant bit goes on for about 45 seconds) has Coach describing the Tyreke Evans three-point-shot attempt near the end of overtime in the New Year’s Even Spurs game and what led up to it. He points to the opposition getting set, getting a look at your plays, cites cases where it’s worked in the past, restates that people should not second guess, and that he’ll “live with everything that they do,” they being the players. In this, Coach seems to exhibit the Endowment Effect, which is similar to Loss Aversion. The Endowment Effect is when one of two equally-valued items or a lesser-value item is preferred because it is in one’s possession irrationally. Here, the current lineups for each team takes the place of the item in possession. The Endowment Effect is explained by Loss Aversion. Here, the prior successes and aversion to a mistake in coaching (e.g. lineups, play drawn up) leads Coach to live with that situation. It should be noted that this run exactly counter to the bullet above. Remember, this stuff is irrational, so this is possible.

A couple of things before I end this.

First, this is not Monty-bashing. This is trying to understand not just his actions but his coaching values. This is placing his actions and statements in a context after giving them attention. Similarly, it is not Monty-praising, Monty-excusing, etc. It’s trying to make sense of the play on the court.

Second, Loss Aversion is not bad. It can be helpful or harmful, but it is often irrational. The other side of this is that the aversion to losses causes one to sacrifice bigger wins (by definition). It is likely this point that has many fans and writers gnashing their teeth at times.

What the long-term prospects for Coach or the New Orleans Pelicans is if this Loss Aversion thing is basically true, and it may be that Coach is steering the team on the right path or the wrong path. The topic here, however, is the extent to which Loss Aversion explains Coach’s actions.

What say you?


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