Scorecasting and Omission Bias

Psychologists have documented many cognitive biases that affect our judgments and decisions, including the omission bias. According to the work on omission bias, individuals tend to view a harmful act as worse than an equally harmful instance of inaction. In their fantastic new book, Scorecasting, University of Chicago Professor Tobias Moskowitz and Sports Illustrated writer Jon Wertheim write about how various biases manifest themselves in sports. They spend a great deal of time, in particular, on how referees affect the game and how they make decisions.

Moskowitz and Wertheim provide very convincing evidence that the omission bias plays a role in how we judge referees, as well as in how referees act. The omission bias would suggest that we would judge a referee much more negatively if he or she made a bad call than if that person simply did not make a call at all in a particular situation... even if that non-call was just as egregious.

Does evidence from sports demonstrate the potential existence of omission bias? Indeed, the authors claim that it does. The authors use data from the Pitch FX system that documents the speed and location of every pitch in all major league ballparks to conduct their study. First, they point out that umpires are generally very accurate overall in major league baseball. However, accuracy lags in a few situations. They show, for instance, that baseball umpires call fewer strikes than they should when the hitter already has two strikes. In other words, the strike zone shrinks. On the other hand, if the count is 3 balls and no strikes, the umpire tends to not call ball four as often as he should. In other words, the strike zone expands. The umpires tend to make bad "non-calls" rather than possibly make the incorrect "active call" that would take the "bat out of the player's hands."

Does omission bias affect business leaders, as well as those who observe and evaluate them? It certainly does. Consider these questions: Do we tend to come to harsh conclusions about the leader who hired the wrong person? Are we just as tough on the leader who passed on the chance to hire a terrific individual? Do we even know about these bad "non-calls" that leaders make? In many instances, outside observers, such as journalists, don't even know about these bad "non-calls" in business situations.