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Majid Ahmadi, Nathan Durst, Jeff Lachman, Mason List, Noah List, John A List, Atom Vayalinkal

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Recent models and empirical work on network formation emphasize the importance of propinquity in producing strong interpersonal connections. Yet, one might wonder how deep such insights run, as thus far empirical results rely on survey and lab-based evidence. In this study, we examine propinquity in a high-stakes setting of talent allocation: the Major League Baseball (MLB) Draft. We examine draft picks from 2000-2019 across every MLB club of the nearly 30,000 players drafted (from a player pool of more than a million potential draftees). Our findings can be summarized in three parts. First, propinquity is alive and well in our setting, and spans even the latter years of our sample, when higher-level statistical exercises have become the norm rather than the exception. Second, the measured effect size is important, as MLB clubs pay a real cost in terms of inferior talent acquired due to propinquity bias: for example, their draft picks appear in 25 fewer games relative to teams that do not exhibit propinquity bias. Finally, the effect is found to be the most pronounced in later rounds of the draft (after round 15), where the Scouting Director has the greatest latitude.

Majid Ahmadi, Gwen-Jiro Clochard, Jeff Lachman, John A. List

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When multiple forces potentially underlie discriminatory behavior, pinning down the precise sources becomes a challenge, making proposed policy solutions speculative. This study introduces an empirical approach, tightly linked to theory, to dissect two specific channels of discrimination: customer bias and managerial bias. To illustrate our framework, we integrate proprietary data with several publicly available datasets to uncover channels of discrimination within the Major League Baseball draft. Our analysis reveals that customer preferences significantly influence the drafting of players at the top end of the draft - those likely to gain immediate public attention and eventually play for the club. Conversely, we observe managerial homophily in the latter parts of the draft, where players who attract little attention and have minimal chances of playing for the club are selected. The observed preferential bias at both ends of the draft incurs a substantial opportunity cost. However, bias at the top end unduly affects competitiveness. Our findings provide significant implications for future research on measuring discrimination and addressing the challenge of multiple channels.