The Houston Astros Cheating Scandal

EconBuff Podcast #26 with Lee Stitzel

Dr. Lee Stitzel talks with guest host Dr. Ryan Mattson about The Houston Astros Cheating Scandal. Dr. Stitzel walks us through what happened in the 2017 season that the Houston Astros won the World Series. We discuss the mechanics of how the scheme worked and what the scale of the cheating was. We explore the advantage conferred by the scheme, and Dr. Stitzel explains how the league, other teams, and other players responded to fallout of the scandal. Dr. Stitzel argues the Astros scheme helped them to win as many as 15 more games than they otherwise might, and discusses how individual players benefitted from the scheme. Finally, Dr. Stitzel outlines how economic research in sport helps us understand human action and behavior, and we explore how Dr. Stitzel views the economics of cheating.

Photo by Ty Welch on Unsplash

Transcript

Mattson: Welcome to the EconBuff podcast. This is Ryan Mattson filling in for Dr. Lee Stitzel this week. Today, our guest will be Dr. Lee Stitzel from West Texas A&M University. Dr. Stitzel has written extensively on sports economics, such as Recruiting in College Athletics, and The Impact on Sales, to The Moving of an NBA Franchise, along with his work on Public Policy and Water Usage. His articles have been published in Social Science Quarterly Growth and Change, The B.E. Journal of Economic Analysis & Policy, and The Journal of Sports Economics just to name a few. And today we're discussing his most recent work [entitled], The Trashy Side of Baseball: An Econometric Analysis of the Houston Astros Cheating Scandal, which is now forthcoming in economics bulletin; [inasmuch it is] part of a Series of papers using a unique and novel dataset provided, [or] a unique and novel dataset regarding this particular scandal. So, Lee. Thank you for being here.

Stitzel: Ryan, I'm excited.

Mattson: All right. Well let's start off. 2017 was a long time ago, you know, pre-COVID. So let's refresh people's memories here. What happened with the 2017 Astros?

Stitzel: Yeah. So, you know, I think, this topic can get, kind of, in the weeds a little bit, if I try to describe everything that's happening with baseball. So, I'm going to presume a little bit of baseball knowledge here with people. And I'll rely on you to, kind of, reign me back in when I'm getting too far into the baseball weeds. So, I'm an enormous, enormous baseball fan. So, I'm talking about, you know, there's 162 game season. I'm watching, like, 140 games on television, and checking, or tracking, or listening on the radio on the rest of them. And so, it's a big passion of mine. And so, it's a real blessing to be able to research and also be a fan, you know. So, it's a big advantage there. So, the 2017 Houston Astros. So, that's the year that the Astros won it all. Right? So, they won a World Series that year. It's actually, kind of, interesting, because I think two or three years prior, ESPN or Sports Illustrated had run a cover that had predicted them as the 2017 champions. And so, there was a lot of hullabaloo about that. Now, the 2017 Astros are one of the most prolific offenses of all time. So, there's a lot of ways to measure that. And, sort of, the traditional ways [is] to just measure the number of runs that they score. Sports economists and people that work in what's called Sabermetrics. So, it's just statistics that are applied to specific baseball problems. They measure offensive output several ways. And one of the ways to do that is to, kind of, account for the different positions that an offense will find itself in. And so, long story short with that is to say: if a batter comes up in more situations with runners on base, [then] you can measure his performance by just the number of runs that he knocks in. But say you and I are in the same lineup, right? And they're always runners on in front of you, and there's never runners on in front of me, then it's really not a very good measure of our performance to just measure how many runs that we're knocking in, right? And so, you can apply that same kind of logic to an entire team. And that measure is called runs created. So, it's like a weighted version of all the different offensive performance statistics that you could have.

Mattson: So, from a from a naive perspective of someone who maybe doesn't know so much about baseball ---- this is what's covered in the Brad Pitt movie Moneyball (2011), right? So revealing my ignorance here with this, but that’s…

Stitzel: No, I don't actually. That's perfect. I love the movie Moneyball (2011). The book is also good too. So, I highly recommend both of those things. But, and that's exactly the idea, right? So, Moneyball (2011) is the idea that there are these mindsets in baseball that are pervasive because of the tradition within baseball. And they're not the approaches that front offices of baseball teams are taking [and] are not efficient. Like, there's truths that you can uncover using statistics that aren't obvious to the eye. We just, sort of, we have these biases or just ignorance. And you can, sort of, overcome this. I'm actually talking about exactly that. So, Moneyball (2011) is born out of the Sabermetrics revolution. And then that's gone on to effect basically every team.

Mattson: So, there's a lot of pressure of what goes on at that, right?

Stitzel: Say that again.

Mattson: That's --- there's a lot of pressure for what goes on at bat --- whether these hits are made, the runs are scored, and everyone's measuring this particular aspect of the game, right?

Stitzel: Absolutely. So, baseball is really unique in that regard --- (for exactly the reasons that you just said) which is you have a very confined sequence of play, where the pitcher starts with the ball, and then he throws the ball. That’s called pitching it. And then, there's this, sort of, sequence between him and the batter, right, of trying to get the ball past him, or to induce weak content contact, so that the fielders can make a play and throw him out, right? So, from our non-baseball fans, there are several ways, right? You could get ground balls, you can get fly balls, or you can get strikeouts. Those are all good outcomes for the defense. So, the reason that Sabermetrics was such a revolution was [in] baseball the data and the statistics can just be cataloged in a way that's unbelievable even before, right? So, the paper that I'm going to talk about here as we go all relies on a couple of really unique datasets. One of which is the measurement of both thrown pitches, right? Because pitches have very many characteristic features, right; [such as] how hard they're thrown, where they're thrown, how much they move or break, or even the sequence of pitches that you put together. And then, you also have batted ball characteristics, right? So, when a ball is struck, [then] where does it go in the field? How high does it leave, you know, relative to the ground? What angle does it leave the bat? How hard does it hit, right? So, as data is progressing, the type of statistics that can be applied to it just keep expanding, right? And you can combine all those things in different ways to learn things about the players and teams and strategies. It's just almost never ending. And we can talk a bunch [about] whichever [of] those things you think are interesting as we go forward. So, I say all that to set this up, right? So, and actually let me make another quick comment before I go forward. The Astros actually, kind of, are the archetype for the sort of second wave of the Moneyball (2011) revolution, right? So, Moneyball (2011) happens. You reference Brad Pitt, right? He's playing the Billy Bean character, who's still the general manager in Oakland now, right? Oakland is notorious for [being an] extremely small budget team that is always contending. They were really good even last year contending, you know, sort of, way above what their budget would imply that they could do. The Houston Astros, sort of, took that to, I don't want to say the next level, [because] that's maybe not a great characterization of that. But what the Astros did was, right, they almost intentionally lost. So, this would be called tanking in sports circles, right, which is to sort of lose intentionally so that you get better draft picks. And they end up with two or three really high draft picks in a row I think. I can think of two particular first round draft picks that are the first pick of the draft. One of those turns out to be Carlos Correa, who's one of the best players on the 2017 Astros team. He's still with the team. He's still very talented. And they build up a lot of talent this way. That's actually, sort of, the same mindset. If you want to win Championships, [then] the worst thing you can do is, sort of, be caught in the middle, and be a middling team; whereas your payrolls are high, and you have much more difficult in infusing talent into the roster. So, the 2017 Astros, sort of, the culmination of that where they're extraordinarily bad leading up to this last competitive window. And then [in] 2017 they put it all together, and they look like one of the best teams that have ever been constructed, right? So, it's not just that they win the Championship, they look good doing it, if that makes sense.

Mattson: So, they've set up this team. They've done all the right strategy. How did they cheat?

Stitzel: Yeah.

Mattson: Where does the cheating come into this?

Stitzel: Right. So, what happens is in late 2019 this story breaks. It just rocks the baseball world. So, a former pitcher of theirs named Mike Fires --- who has then moved on to two different teams by this point, he ---- comes out in a report with The Athletic (which is a news, you know, sort of, reporting and commentary on sports). And the story breaks that says that Houston Astros used electronic sign stealing to cheat, right? So, when you're engaged in the sequence of competition, [then] the pitcher and the catcher want to communicate, because they want to employ a different strategy with the sequence and types of pitches that they throw in order to get the batter out. You could imagine that would be extremely useful information to the batter, right? So, the Astros set up a camera in center field where they can observe the catcher. And what the catcher does is he uses the sequence of hand signals that he kind of tries to hide, right? But if you put the camera behind the pitcher, then it you're going to be able to observe them. And there are other factors at play that I want to get into as we go in regards to the camera. But the Astros intercept this, and they combine this with several things. One of the things that they combine this with is a system that they use they call Codebreaker, which is literally designed to discover what the sequence of signs that different teams use, right? So, what you don't want to do if you're a pitcher and a catcher is have the wrong signal, right? So, I convey a signal --- a sequence of usually, literally, to hold my hand down while I'm in the crouch. And then a one, or a two, or my pinky, or whatever hand.

Mattson: [Gives catcher hand signs]

Stitzel: Exactly. Just like that. And then, you see what I'm doing, and you say: O.K. so now he wants me to throw this type of pitch in this type of location, right? So, you really want to be on the same page with that when you're the pitcher and the catcher. One, you know, maybe for a non-baseball fan, one of the most obvious reasons is you do not want to be a catcher, trying to catch what you think is going to be a slider, and then it ended up being a fastball. So, fastball is slang for just the a pitch, that a pitcher will throw, that's the straightest, fastest pitch that he can throw. So, you grip the ball in a particular way in order to, sort of, maximize the velocity that a pitcher can throw it; and then, everything else [is] what’s called off-speed or breaking balls. So, the Astros --- they capture what all the different teams that they're competing against over time. They decode these signals. And there's some conversation about how far back this went. They might have been laying the groundwork back in 2016, because you can do all of that kind of work in order to break the code, you know, after that. You don't have to do it live, right? You can take the data from the game. You can observe the signals, and then match it up. And so, they develop a system which they can input what the sequences are, and then use the previous data from this team, and then they can deduce what your hand signal is. So, when there's no runners on, when --- so sign stealing, within the context of the game, isn't necessarily unethical, right? So if you're up to bat, and I'm a base runner on your team, and I'm on second base, and I can see the catcher's hand signals, [then] there's nothing against the rules of baseball if I would somehow convey to you what the signal is going to be. So, you'll see episodes of this in baseball every now and then, where if you're up to bat and I, you know, touch my helmet or something, then I 'm letting you know the pitch is going to be outside, or it's going to be inside, or it's going to be a fastball, or it's going to be a slide, right? And for a base runner though, you don't have that ability to reference the software program that the Astros put together to decode those things. That's something that I have to know. It's a part of the game. It's part of strategy. Now, pitchers don't like that, and other teams don't like that. So, you might pay consequences within the game, right? You might be hit by the next pitch. They might throw the ball at you. And there's, you know, that would probably be a whole other episode if we wanted to talk about the unwritten rules of baseball. And so…

Mattson: The batter’s getting --- the batter has no idea what the catcher and pitcher, or they shouldn't have any idea with catcher or pitcher [has] thrown. But, if he has an idea of where either that fastball or curveball is going, [then] he has a higher chance of hitting it?

Stitzel: Yeah. So, your reaction time to hit a thrown pitch is theoretically too little for you to actually react to it. So, it's about 400 milliseconds is your reaction time.

Mattson: Yeah, you look at the face, and then look back at the pitch, right?

Stitzel: Well, you know, that's impossible, basically impossible, right? And so, what you're saying is: well, if I'm up to bat, [then] why couldn't I just glance back at the catcher and see what he's doing?

Mattson: Yeah.

Stitzel: The answer is by the time I turn my head, those 400 milliseconds might be over, right? So, I guess in theory if you could look back and then look forward, and, you know, sort of, refocus where you're looking, in time that before the pitcher has begun his throwing sequence, [then] that's theoretically possible. Yeah. But it doesn’t. It almost never happens in practice. And in part that's because of the unwritten rules of baseball; because if you're a person who gets a reputation for doing that, [then] there will be other consequences.

Mattson: So, the Astros found a way around that issue. They did find a way to signal to the batter.

Stitzel: Precisely. So, the Astros get this live camera feed that's happening in real time.

Mattson: Hmm mmm.

Stitzel: They have, literally they have an operator behind their dugout. So, you've got a dug out that's where the players stand when they're off the field, you know. It's like a bench in other sports, right? And then, there's this little hallway that goes back off of the dugout, back into the rest of the stadium, right? So they place an operator there who's getting the live camera feed in. He's putting the signals into the system to decode what it is. And then, there's several ways that their hype, the postulated they convey this information. But the hilarious thing is, the main way it seems was, they literally took a bat and banged on a trash can, like a big, sort of, commercial trash can that you would see at stadiums or large events, so that it, so that you could, so the batter could hear it, right? So, they developed the scheme where if there's no banging happening, then the batter knows that it's a fastball. And if there's a bang on there, then they know that it's an off-speed. Now, this is extraordinarily useful, because most pitchers only have a limited number of off-speed pitches that they're good at. So, in theory, right, you could throw a slider, a curveball, a changeup, a split ball, a splitter, a fork ball. You could throw just this unbelievable variety of off-speed pitches. In practice, you can usually limit it down to one or two things. O.K. And so, the main way that this functioned was simply if there's no bang, then it's a fastball. And if there's a bang, then it's his best off-speed, or sometimes his only off-speed, right? And so, this gives the batter an advantage. So now, I have this the split second to react. A split second to react. And if I don't hear a bang, then I know [it’s a] fastball. And this works strategically, because batters are actually trained in exactly this way, right? So, the saying in baseball is to sit fastball and adjust to off-speed, right? So, that's my normal strategy to act as if I'm going to get a fastball, and then if I can decipher that it's going to be a non-fastball as it's coming, then try to react to it; because anything that's not a fastball, [then] I'll have slightly more time to react to [it], right? And so, go ahead.

Mattson: So, this, kind of, I think, relates to one of one of our listener questions that wrote in. Gabriel Benfonti of Oaxaca City, Mexico and also in Taos, New Mexico asked: what's the rate of swinging stripes on breaking balls below the knees or in the dirt given this audible signal or other signal? And, I think, also related to that he goes on to ask: if there was a difference, you know, you talk about this camera. Did they have that at away games? Was there a difference between the home and away games? So, I'm building off of what you're talking about there I guess. Did this change the behavior of the batters, and how flexible were they able to apply this?

Stitzel: Yeah, so let me summarize really quickly, right? So, the difficult part of hitting, you know, is not knowing what you're facing. The Astros are helping the batters by conveying some of this information, right? And for certain batters they actually do this a lot. So, some of the batters, as much, as many as 70% percent of the pitches that they face at home they get this information conveyed to them, right?

Mattson: Sorry, 70%?

Stitzel: 70% for some of them. The players that you would know, sort of, the high profile players [like] Marwin Gonzalez, Alex Bregman, George Springer, [and] Carlos Correa --- these guys that are the top Astros players were getting about 40% percent of their pitches when they're at home during that [time where] information [was] conveyed to them, O.K.? So, I'm talking about --- I want to give a sense of the scale of this operation. It's enormous, right? And we can talk about the sequence of it later. But O.K. So, the question is: what's the rate of swinging strike? So, I want to --- before I do that, I want to --- set that up a little bit. There's a couple of ways that you could benefit from this, right? One is --- if I know what type of pitch that I'm getting, [then] I might be able to hit it harder, right? And so, hitting it harder conveys a big advantage, right, [which means I am] more likely to get home runs, right? If I hit it actually at a defender, [then] it reduces his reaction time and his ability to field it. So, it raises my ability to get hits, and it improves the type of hits that I will get, right? So, a single is when I can just get to first base. The harder I hit the ball in general, [then] the more likely I'll be able to get a double, or a triple, or in especially in this era, a home run. Another way that you would be able to advantage your hitters is to cause them to be able to lift the ball more, right? So, this is what's called the launch angle revolution in baseball, right? So, the same --- one of the outpourings of Moneyball (2011) with this new data that I was referencing, that's about batted ball characteristics, is they realized there's this optimal swing path that maximizes your chance to get extra base hits, and specifically home runs, all right? The third way, and this is what Gabriel is asking. It also improves the type of pitch you will swing at, right? And so, probably the most high profile looking back, right, the most high profile time that somebody, sort of, realized something was up --- because there's gamesmanship all the time, right? So, one of the defenses you'll hear is: of course, sure the Astros were cheating, but everybody was, right? And part of the reason that the Astros case and why this scandal is so big is they're cheating in a way that other people and other teams really aren't, you know, except perhaps the Red Sox. So, what happened was --- and this is where the paper that we're here to talk about, which is our paper, you are my paper…

Mattson: Yeah.

Stitzel:…along with the colleague ---- one of the things that we discovered in this process is that you actually see about a 10% reduction in what's called chasing, right? So, swinging at a non-strike. So, right, a hitter wants to swing at pitches that are close to the center, or over the plate, or a strike, because that improves his ability to hit it and hit it hard, right? So, you have, kind of, these multiple effects. I know what type of pitch it is. I can hit it harder, right? I know what type of pitch it is, or where it's going to be, then I can lift it better. I also can be more selective in the type of pitches that I swing at, right? So, depending on the situation, if I hear a signal from the dugout that is going to be a slider, [then] I just might not swing no matter what, even if it's going to be a strike, because I don't want to swing at sliders. I want to swing at fastballs, right? So, one of the most high profile times that this was seemingly discovered looking back [where] people, sort of, honed in on this is a White Sox pitcher named Danny Farquhar (who incidentally is actually more famous for having a brain aneurysm, almost dying, and then coming back to the majors). So, he's a pretty interesting story in and of himself. And he hears the banging, and he realizes something's going on, right? So he throws a pitch, and the Astros player fouls. I think it's Evan Gaddis [who] fouls it off. He throws another pitch fouls it off again. And then he's looking around, and you can, sort of, see him gesturing to the dugout. And he tells this catcher [to] come out here, right? So, one of the ways to defeat this scheme is to use a more complex set of hand signals that are difficult to decode, or either potentially the Astros don't have it decoded, so they can't use it at all. Or use multiple hand signals so you increase the amount of time that somebody would have to use to decode it. And then, that interlude between when you send the signal to when you throw the pitch is now eaten up, such that the operator behind the dugout can't convey the signal.

Mattson: But that increases cost of the pitcher and catcher as well, right?

Stitzel: Yes. Right. Because it increases their potential error, right?

Mattson: Uh huh.

Stitzel: Like O.K., what if I'm the catcher [and I] really want you to throw a slider; but now, we have a complex set of hand signals, and you think: O.K., he wants me to throw a fastball, right? So it can really cause problems. So, you don't want to do that. And actually, your base set of hand signals (if you don't think you're being spied on) is very, very simple. It's very easy to decode, right? Like, you and I could be watching a game --- and if you and I could see the catcher, and they were using the sort of common baseball parlance ---then in a matter of an inning, you and I could figure out what that code was, right?

Because they're not really trying to hide it, because they think as long as the batter can't see it, and there's no runners on base, [then] there's no reason for us to hide the code. And so, there's some simplicity there. And even if it's a relative, even if it's not, sort of, the traditional [hand signals] --- one as a fastball, you know, two is a curveball, three is a slider type of thing, that everybody down to little league knows ---- even if it's something else, [then] it would be relatively simple. So, what happens is the Astros then reduce the rate at which they swing at non-strikes, especially pitches that are away and below the zone which are the hardest to hit by almost 10% percent, right? So, we're just talking about an unfathomable number, right? If you have a 10% reduction in swinging at bad pitches, I mean, that would take you from being a roughly average hitter to being one of the most elite hitters in regards to your batting eye, and how frequently you would chase. So, the second question there you asked was, sort of, below the knees or in the dirt.

Mattson: Yeah.

Stitzel: So, for listeners at home (it's changed in recent years), but the traditional approach, [or] the traditional mindset, is the thing that will get the most chases, and the most weak contact, are pitches that are kept away from the batter. So, a right-handed batter then you would throw in to the pitcher's left or to the catcher's right to keep it away from them; because in theory, right, a pitch on that's closer to their body --- you know, but not so close they can't hit it, but closer to their body --- allows for the bat to travel further when it hits it. So, they will hit it harder, right? And also, one of the things that you're taught as a batter, right, is to keep your hands in and to rotate. So, it, sort of, creates a better, just hits the ball harder, right?

Mattson: Hmm mmm.

Stitzel: So, one of the conventional wisdoms [is to] keep it away from them. They won't be able to hit it as hard. And a lot of hitters are better at pulling the ball (i.e., hitting it when it's inside and then hitting it to that field). So, for a right-handed batter --- hitting it to left field. For a left-handed batter ---- hitting it to right field. And then obviously, being further away, right, your eyes are well above your strike zone. So, if you lower the pitch even more, getting it down below the knees, they'll trade, you know, the traditional logic [which] is that they'll hit it less hard there as well, and be more likely to miss it. Now, some of that has really developed in recent years, sort of, strategically how pitchers think about it. And so, they --- there's a very there's a big mix of throwing off-speed below the knees. But then, actually throwing fastball above the strike zone where it's also hard to hit it. And it, sort of, plays on the --- it's very tempting, right? If you have a pitch up here, you know, [and] it's up high around your chin, [then] you can't get to it because you've thrown the fastest pitch at the shortest path to the catcher; and the batter will be tempted to swing at it, but will still produce [a] poor outcome. So, there's a lot of complexity there, but the traditional thing is batters that don't swing at pitches away and don't swing at pitches in the dirt are better than ones that do. And the Astros dramatically reduced their chase rate in that, right? And so, at the time they're actually articles being written about this revolution of: wow, the Astros are hitting it harder, but they're striking out less, right, which is usually a trade-off, right? I swing really hard. So, if I hit a home run, but I'm more likely to miss. And the Astros were, sort of, throwing that conventional wisdom out. Now, they have very talented batters. I don't want to really take away from them. But in retrospect we, kind of, know why they're throwing that conventional wisdom out.

Mattson: Sure. Sure. So, we can see anyway. You're making the argument the individual player can improve their performance and their ranking by swinging at pitches. That they could probably hit better not swinging at pitches that would be bad for them to swing at and get a strike. In the overall though --- and going to another listener question from Ben Johnson of Tulsa, Oklahoma, which I'll kind of weave into this ---- so the Astros cheat. They win a World Series. The Tennessee Volunteers cheat, and they're consistently sticks in the SEC West. Does crime actually pay? Did this really aggregate up to enough to say they won the World Series because they cheated? I mean, is this to play devil's advocate. Is it really that big a deal, if this is part of that strategic play that's going on between information here?

Stitzel: That's a phenomenal question. There's so many ways that you can take it. But so, I want to share a little anecdote, because that question is hilarious. My brothers are actually Astros fans. And they were Astros fans actually just by happenstance, not that they were bandwagon fans. But they just started liking them in 2017, because one of my brothers moved to Houston. And so, as a non-Astros fan, I'm actually a Texas Rangers fan, we get into this a lot, right? So, holidays are really fun because we argue about this stuff a lot. But their favorite rejoinder is: if you ain't cheating, you ain't trying, right? And so, there is some kind of truth to that, right, which is to say: you know, there is some sense in which people are really affected by this. And right, one of the backlashes to this scheme is there were several players, who during that season had very bad performances against the Astros, when the Astros were known to be using the scandal. And then, the next day their team released them, right? So, they ended some people's careers that might not have otherwise been ended, O.K.? So, in general, you know, it's sports. It's just baseball. Come on man. Like, it's not a big deal. I do, kind of, get that argument, but there are real effects here. There are real effects here. The second question is: O.K., what about the Volunteers versus the Astros. So, for our non-students that are in the listening audience right now, what they're referencing is the Volunteers are, sort of, they're known for recruiting violations, right?

Mattson: And so, different kind of, scheme.

Stitzel: Different kind of cheating, right? And so now, you're getting better players, and you're not necessarily cheating on the field in the way that the Astros are cheating, sort of, in strategic play. Are those things different? That's a really good question, right? Because on one hand, there's a very mechanistic [method if] you get better players, [then] you have a better product, [and] away we go, O.K.? And then, the thing that I referenced earlier comes back into play here as well, which is the Astros are like: well yeah, we cheated. But we just cheated better than everyone else. Everyone else was cheating as well.

Mattson: The Lance Armstrong defense.

Stitzel: Yes. O.K. All right, exactly you know. If I'm not taking steroids and everyone else is, then I'm just, you know, irrationally handicapping myself. So, the problem is, and Volunteer fans would probably tell you this: well yeah, we're cheating. But you're telling me Alabama's not cheating. You're telling me Auburn's not cheating. I mean, there are, like, known cases, especially in the Auburn case, of them cheating in that same regard. You know, so from, sort of, a if you're not cheating, you’re not trying prospect, it's saying: well maybe, just Tennessee's not very good at cheating, O.K.?

Mattson: [Laughs]

Stitzel: So, you know, but we're bothered by this as sports fans, right? Like, we want the game. We don't like it when the Patriots are stealing people's audio, and recording other people's sidelines…

Mattson: And inflating baseballs.

Stitzel: And yeah, you don't.

Mattson: And they come up with excuses.

Stitzel: Yeah. We don't like it when they're deflating footballs. We don't like it when players doctor baseballs, right? Like, that's a really classic example of pine tar and stuff like this, right?

Mattson: Right.

Stitzel: And the list, we could go through every sport, right? I mean, the list of ways and types that people cheat is just unbelievable. It just so happens that this is a really good team, who cheated really well, and the effects were large, which is to get to your third question. So, the…

Mattson: While you're thinking [about] that --- really fast, let me clarify that, I guess, third part of the question. In this paper, that you and our co-author Rex Pjesky and I have looked at, what's the quantifiable amount that the Astros gained from this specific scheme, that they're employing on the field in in real time?

Stitzel: Yeah. And the way to measure that is, you know, fairly complex. So, I'll start with the punch line, which is the estimates that we put together, estimate at least two games, and as many as 15. Now, that's a pretty wide range, but it's a wide range because of the question that Gabriel asked earlier, [which was] did they cheat differently at home versus on the road? The answer is: there's some data that's been available made available by Tony Adams. Very cool dataset, and he actually does some neat visualization with it. So, I recommend looking up that data if you're interested in this topic at all. What he does is he goes and he finds those audible signals of the banging on the trash can using an audio software. Audio software are pretty sophisticated now, right? So, you can show, teach it a sound, and then it will go find the sound in any datasets you could put in there. So, he fed it all the home games. And so, he basically showed this is when they're banging on the trash can. It starts in. So, the baseball season typically…

Mattson: You can hear it in, like, over the crowd, over the yelling?

Stitzel: Which is amazing, right? And but, it's not, I guess that's not super surprising, given that the entire point of the scheme is that the batter has to be able to hear it, right? So, on one hand you're like: well, wait a minute. But remember, the cameras are located inessentially the same place as the players are, right? And in fact, some of the cameras from the broadcast will actually be closer to the sound, because they'll be in that dugout. Then the batter will be who's in, sort of, the center of the field, and the center of that part of the field, right? So, the answer is: we more or less know the baseball season starts in late March, early April, and it runs all the way through the end of September, and then the Playoffs start in October. So, we essentially know that the Astros started cheating in earnest in late May. So, all the way through June, July, August, and September, right? So, four months out of your six-month season, there's an a very large amount of cheating, right? So, you're talking about virtually every home game, virtually every at-bat, right? You know, at least half the at-bats that are/that you're having this kind of strategy. And we can talk more if you're interested in, sort of, the complexities of how that got employed. But I'm saying that to make this point which is: you got at least two-thirds of the home (the season) where the home games are cheating. We almost know that virtually for a fact. But there's accounts. There's more than one way that you can convey this information, right? One is players shouting certain things, right? So, if you've been to a baseball game, or if you have experience playing baseball, right, [then] you know that the people in the dugout are shouting: “atta baby” and “there you go.” Lot’s of things that they'd be shouting, right? And, like…

Mattson: Words of encouragement.

Stitzel: Yes, and that's a huge part of the game. That's a huge part of the games. I don't wanna make that into something it isn't. It's natural, it's normal, it's healthy, it's good. It makes the game part of what it is. But perhaps we assign you and we say: O.K. Ryan, when it's a fastball, and the guy from the dugout conveys the information to you, then you shout something specific, right? And so, for a particular batter, right, they're gonna have different nicknames or something, right? And so, perhaps you shout something that can be as benign as a variation of that nickname, right? Carlos Beltran is one of the batters, one of the people, sort of, most indicted with this. He was a hitter at that time on the Astros team. And perhaps you, instead of shouting his nickname, you call him Carlos, all right? And then he knows. He hears that, and then he can prepare as if it were the trash bang, the trash can banging, O.K.? So, it's also possible at the time that they cheated on the road, right? So, Astros defenders will say: well, there's --- they didn't cheat on the road. How would they have done that? Well, the answer is: it's actually common at that time. And the rules have since been changed because of this incident, that you could actually see the game live streamed into the stadium, and they would use that for strategic and preparation purposes, right? And so, it's --- every team would have essentially had access to that. So then, there's in some stadiums, and I don't have a catalog of which stadiums, you'd be able to have one particular camera feed that actually would capture the catcher, right? Now, the Astro set up a camera specifically to do that, right? But you could use a normal broadcast camera, and you'd have all the different feeds there, and then you could pick out the one if you could see the catcher, right? So, for example, the Yankee Stadium is pretty well known for having a view that you can see the catcher. And that's just, though, some of those things are almost by happenstance the design of the stadium that's out in center field and whether you can see it. So, the point is to say this: we know that at least two-thirds of the season they cheated while at home, right? It could very well be that they found the trash can banging in late May, but they were using other techniques [like] shouting [and] whistling. There's even accusation of them, like, using buzzers taped under their jerseys, you know, which would be an extraordinary application of the cheating if that's how it happened. And so, the answer is: we don't have a sense really of the breadth of the scheme in on away game, during away games. And there's even some debate as to what happened in the post season. And so, one of the defenses --- there's, I think, the original article that broke the story --- said there were two people that said the cheating happened in the post season, and one that adamantly denied it. So. there at least some people willing to testify that this cheating continued into the post season. The paper that you and I and our colleague wrote --- we don't really investigate that. We limit it too. So I say all that, [in order] to say this which is: if you take the smallest possible window --- which is only the games that we actually observe the cheating in, [and] none of the other home games, right, so that, sort of, two-thirds of the home games (or slightly fewer) --- [then] that counts for at least two or three games, right? And so, I think, some of you are saying well: 162 games is two or three games, right? Divisional races very often come down to a game or two, right? So, if you could promise your team would win three more games this year, [then] everybody would sign up for that [inclusive of] coaches, players, [and] fans. Everybody would sign up for that.

Mattson: It is on the margin of going to the World Series versus not going to the World Series.

Stitzel: Exactly. Now it happens in this case that the Astros win by, I want to say, 20 games. So, they run away with the division. And they probably would have won anyways, I think, is the conjecture at this point. But if we say: well, what if they got this level of, you know, of benefit from the cheating scheme? And they cheated the entire season? That turns out to be about 15 games. Now I don't --- probably, it's probably unlikely they cheated in every single game. And, you know, they had it going from day one. One of the points, I think, that you made that, I think, is most useful in the paper that we wrote together is to say that they needed this training period. And you can almost observe it in every game and definitely season long. So, it's probably likely that their April games [that] they're not really cheating very much. But it seems likely to me that there's at least some of that happening on the road as well. And the reason I think that is actually, sort of, like a strategic reason. I'm not sure you really want your batters having to go back and forth between having that and not having that in their tool bag, right? Like, that could actually be detrimental. So, I suspect there's at least some. And that's speculation on my part. That's speculation.

Mattson: Sure.

Stitzel: But I'm not alone in speculating that.

Mattson: But if you learn a system, or if you learn a language, [then] you don't want to, you know, learn something, stop using it, and then try it again. That --- yeah, again in the paper you can see in the graph the potential training period, and then the actual use of it, which I think is very interesting.

Stitzel: Yeah. So, let me describe that. You know, so if you take the home games, right, and you just put them on a chart, [then] you can see where in April and early May there's one or two or four or eight times that you observe the bangs. That we can hear the audible banging sound. And then, starting in late May going forward, you're talking about 20-30-40 even sometimes upwards of 50 times that you hear that in the game. And I want to remind the listeners hearing the bang only tells us the Astros are conveying that there's an off-speed. Most pitches thrown will be fastballs, right? So if there's a five pitch sequence, and we hear two bangs in there, there are actually five times that a batter got information. Because not hearing the bang when he knows that information will be conveyed to them also means information. So, that's actually five total instances. And to take that a step further, if the batting outcomes are happening, [and] if they're improving, [then] the at-bats will likely to be shorter actually, right? Because instead of having to go through this sequence, and then guessing, or just reacting to pitches, now if I know that second pitch is a slider, and I'm ready to swing at a slider, and I put it in play, [then] the actual number of pitches happening in every bat will actually come down. So, you're talking about almost every pitch in some of these games the Astros are cheating on.

Mattson: I do want to correct one thing, since I am your co-author on that. I think you misspoke, because you said the graph of instances of bangs. Actually the graph is the percentage of bangs heard for at-bats. So, instead of you're saying one to five, actually it's one to five percent of at-bats with bangs up to upwards of 54%.

Stitzel: Oh, O.K. Very, very, very, good. So…

Mattson: I know that's what you meant. I just want to clarify that.

Stitzel: Yeah. So, that's a that's one of those things where we have several variations of the graph. So I've seen the version that's in raw numbers. So, I think the point remains, right?

Mattson: Yeah.

Stitzel: So, you're talking about a very low percentage, to a very high percentage, very low number of bangs to very high percentage or number of bangs. Yeah. So, I think the point stands.

Mattson: So, we know that they cheated. We have people who reported. We have this econometric analysis that you've done with your co-authors that's showing that there was --- I'm abusing the term significant O.K., but --- a significant effect, right? A large effect here. What was the response from the League? And how did players and other teams respond? And again to work in a question from listeners, because I like doing that. Alex and Lauren Morgan --- big Rangers fans from Dallas, Texas want to know: are the Astros going to be giving back their World Series bonuses? And I'll go ahead and add this last part of that question to, kind of, get on how people feel about this scandal. Or is their confidence so bad that they had to cheat to win?

Stitzel: Yeah. So, I would love to unpack that, because there's so many good things. There's so many good things there. One is, you know, my conjecture would be that there is a good chance the Astros don't win the World Series; because winning the World Series is hard, and there are other good teams. And when you're talking about a marginal effect as big as what we've found, there's many points along the way which the Astros could have been eliminated, right? You could have not won your division. But it's actually a huge advantage to have the scheme in your pocket all along. You build a bigger divisional lead earlier. That can basically only be good, right? You use it in the first round of the Playoffs, second round of the Playoffs, World Series. [In] each of those you've improved your odds to win the Championship, right? So, it's, like, while I think ---- there's some case to be made, you know, [that] the Astros offensive performances were actually better on the road during the World Series and the American League Championship Series, right? So, there's some --- evidence there [or] some, sort of, that's not evidence, like --- stylized facts, I guess, that would work in their favor. So, the, I would say, the, you know, the MLB's response was relatively soft, right? The general manager and the coach get a year-long suspension. Astro’s subsequently fired them. One of them --- the coach has actually already been hired back into a major league head coaching job, right? A managing position. So he almost paid no price, right? I mean, I guess he, you know, he's now with the Detroit Tigers. You'd say: well, the Astros are better than the Tigers are right now. But I really doubt he's crying that he has one of the 30 managing jobs in in the entire world. They get fined a couple of draft picks in the two subsequent years of 2020 and then 2021. So, that's a relatively big penalty. And then, I think, it's a $5 million dollar fine, which sounds like a lot of money, unless you're a baseball franchise, in which case it's not really that much money. But it's the maximum fine allowable. And then what happened was the players actually end up facing no penalties. And the reason for that is because the MLB did the investigation, and relied on their witness and testimony, [so] they had to give them immunity. And so, I understand why that leaves a bad taste in people's mouths. But I think there's an argument that was necessary. So, you know, they didn't consider an asterisk on the Championship. They didn't consider taking it away. They didn't take away. And there's no penalties on the players, sort of, other than, you know, like social baseball cultural ones. That backlash was actually really big though. So, normally, you know, there's a fraternity type of atmosphere among baseball players, right? If you've been in, and you have that experience of being a professional player, [then] you know there's just you and I and non-baseball players. We could just, sort of, not get into that circle. And they're very friendly with each other. And, you know, it's not one of those things where players on one team hate players on another team like that. And that's especially the case in this day and age, right? So, there probably used to be a time when that would be a little more heated. It's really not, even among your biggest rivalries like Red Sox [and] Yankees. But the player response, at least the one you'd observe on social media and in interviews, was extremely negative and extremely strong, right? So, the players were --- other players on other teams were --- very mad. Now, some of that could, sort of, be an indignant righteousness. Like, maybe they cheat too, but and so they're posturing or something. I kind of thought it was genuine personally. So, that penalty is pretty big I imagine on the other players. Now, we got to observe them play some games this year. And we didn't see a lot of --- we saw a couple of --- instances. Joe Kelly of the Dodgers, for example, got really heated, and actually ostensibly threw some pitches at the Astros players during a game, which again, kind of, a big no-no, right?

Mattson: Ouch.

Stitzel: But we also saw cases where, sort of, normal baseball interactions during the game --- or before the game, when you know if I’m standing on second base, and you're the defender of the shortstop or something --- [then] you might come over and talk to me and, sort of, exchange pleasantries. We saw some of that happen during the season. So, I, sort of, suspect it will be forgotten somewhat quickly. And the shortened baseball season as a response to the pandemic, might have helped the Astros a lot in that regard. And then the last thing that you said was: what happened to their confidence? And, you know, why did they have to cheat to win? And, I think, that's a fascinating question.

Mattson: Weren’t they going strong that season? Weren't people saying they were going to be this great team?

Stitzel: Yes, right. There's a --- O.K., again I want to go back to make that point. There's a chance this Astros team was the best team anyways. But there's actually, right, normally we get diminishing returns to talent on a team. If you already have a good team, [then] adding another player, you know, helps that team. You already have a great team, and then you add another talented player, [then] the return to that is pretty small. And, I think, that's very true over a regular season. The problem is in a post season you’re talking about a high relatively high variance situation where you have to survive every single stage. So, widening the talent gap and, you know, sort of, decreasing the chances that you would lose at any point in that tournament, [then] the returns to that are actually very, very high, right? And so, I would almost say: yeah, they were probably going to win the division anyways that year. The question is what would happen in the Playoffs? And so, the confidence thing is actually really interesting, I think, going forward. We actually saw news break last night. One of the players --- George Springer [who is a] former Astro [and now a] current Blue Jay, he --- got a six year $150 million dollar contract. And he didn't have a particularly good year this past year. But he's an extraordinarily talented player. He’s fairly young. He's a good hitter. And so, there's some sense there that the Blue Jays are signaling. We don’t think that he had to rely too much on the scheme, despite him being one of the bigger users of the cheating scheme, right? So, for Astros fans, one of the things you can take solace in [is] one of your best players Jose Altuve he didn't use it much; [whereas he only used it] about 11%. So think about the difference between somebody like Springer using it 40% and Altuve using it 11%. You know, so you can you could say Altuve’s benefit from this game is relatively small. Somebody like Correa, Bregman, [and] Springer --- these guys used a lot, but they're inherently talented, right? You don't take a terrible player and make them into a great player doing this. It is a marginal effect in the sense that economists would use the word marginal.

Mattson: So, we've, kind of, gone over the what and the how. And, you know, since this is an economics podcast, I did want to ask some of the why questions, as I was privileged to be a co-author on this paper with you along with our colleague Rex Pjesky at West Texas A&M here. But Rex and I, for example --- Rex is a public policy economist as you are. I’m a macroeconomist. So, this is a whole new world of micro for me. You were the bona fide sports economist through this. And what I wanted to get from you was --- as also as the person who's hosted and created EconBuffs, and has talked with this large variety of different economists --- what can we learn about economics and individual behavior and group behavior from cheating scandals like this? And this is, kind of, a three-part question here. What can we learn through these scandals in terms of economics and economic intuition? What does the economic methodology bring to the table when we do this? I know why is it important for us to publish a paper on this, for example. And in general, why is it important to take the economic methodology to study sports --- both on the field and off the field, as you've done with your MBA rankings --- and also looking at sales revenues --- for (or sorry) your college sports reading rankings --- and then the MBA franchise moving and how that affects firm sales. Why sports economics?

Stitzel: Yeah. That's a great question. So, let me start with the last one first. And the answer to that question is economics is the study of human behavior, right, human action, choices, [and] how people respond to incentives, right? And that last point is probably my answer to your first question. The amazing thing about sports, right, is it's a way that humans organize. It presents us with choices, decisions, [and] strategies. There’s many of the things that we do in other facets of life are highlighted and observed and scrutinized in sport, right? But it also gives us an opportunity to learn things about human behavior in a context that one, we can observe it better, and two, the rules of the game are clearly defined, right? The examples are very easy to draw from, right? So, I get --- I am blessed to be able to teach sports economics. Day one I say: this is an application of economic thought using sports examples, right? Drawing from sports I’m teaching you things about the way that humans behave, how does society order, [and] how do we respond to incentives. And we're going to do that by studying sports. So, the nice thing about that is: here’s a perfect example. So, why study cheating? Well the basic framework for economists --- and this has been added on, so, you know, I’m talking about something that happened in like what the late 60s or 70s with Gary Becker, right --- is the benefit of cheating versus the punishment of cheating [is], sort of, moderated by the probability of being detected. Now, in sports we have, like, we were saying earlier this, like, ethics of sports. If you're not cheating, you're not trying. Is that a mindset we would want to take to everyday business? Is that a mindset you’re going to take to your marriage, right? Like, that's not good.

Mattson: Yeah.

Stitzel: And how do you study that? Like, show me the data. I'm sure somebody's done this, because this would be extraordinarily interesting, right? Show me the dataset, where we can observe the way we can observe sports, the dataset on people, you know, being dishonest in business? It's very hard to observe. Show me that dataset when it comes to marriage, when it comes to, you know, anything that we might cheat on, right? Your Friday night board night with your friends, and, you know, cheating is happening. And that has real impacts on your life weirdly enough, right? And so, the things that we're studying in general in sports are about the way that humans coordinate, the way that they interact, and the way that they compete, right? And so, I actually think it's extraordinarily useful. One of the, actually one of papers that a co-author and I are working on, that you haven't mentioned, that's, sort of, related to sports is one where we look at the way that supposed experts rank different. So, it's power ranking in the NFL. So, the applications.

Mattson: You work with Dr. Hoffman?

Stitzel: Yeah, go ahead.

Mattson: You work with Dr. Hoffman?

Stitzel: Yes, exactly. So, your rankings of how you would power rank NFL teams, you know, and where we can observe experts making these choices of do I rank them just as accurately as I think I can? Or am I trying to get people to read my rankings? And so, I create some differences from other experts. Think about the application or the implications of that to ranking any number of things --- ranking universities for example. Are the rankings that are being put out of different universities --- are they just purely trying to reflect the true thoughts of the expert who’s ranking them? Are they also trying to get you to click on it and be like: well, in these rankings Oklahoma’s, you know, this. And in these rankings Oklahoma is that. And, you know, we're higher than Kansas over here, but we're lower than Kansas over there, right? Like, the number of applications of that is really, really broad. So, the first thing I would say is [that] sports is an excellent place to study human behavior, human coordination, human competition, and the way that those structures interplay. And lots and lots of little lessons that happen in it. You know, the Tennessee Volunteers question comes back to mind, right? Like, why would you potentially cheat at recruiting? Well the answer is: because the Tennessee Volunteers coach probably makes $2 million dollars a year, right? And it --- as trite as that answer is it’s also --- still [is], I think, a fairly profound insight into what will happen. So, why study this particular case? Well the answer is: this is a response to incentives, right? And it probably also gives us some insight into the way that people view unethical behavior and cheating. Ostensibly, you know, one of the things we’d like to understand here is what’s the marginal benefit, right? You had questions that came in and said: well, does cheating pay? Does crime pay, right? Usually questions are like: well, how much did it help them at not swinging pitches outside the zone? Like, people are inherently interested in the benefits of cheating. And this goes back to that idea that I set us up with which is: if the payoff to cheating is really high, and the likelihood of detection is really low, right, [then] you're more likely to see more cheating, right? So, if consider, you know, you and I teach classes, [then] this would resonate with people at basically any level of teaching. I give my students a paper test, and then I leave the room, and I tell them [that] I’ll be back in at the end of class period. How much cheating is going to happen in that class? I give them the class, and I tell them I’ll be back randomly at some point between now and the end of class. How much cheating is going to happen? I give them the test, and then I stand there and, you know, read a book in the front of the room, [where I am] not really looking up. How much cheating is going to happen? I hand them the test, and then I walkaround within the room, staring over the shoulder, right? O.K. then I hand them the test, and I hire an army of Tas (teaching assistants) to look over every single [person], right? So, it gives us idea about the benefit of cheating. It gives us idea about the potential detection of the cheating. And then, you know, the benefits and the cost, right? So, if you're the Houston Astros and you said [that] you can win the World Series in in exchange for this, [then] that's their entire goal, all right? So, the end goal now is this the same kind of story. If they don't win the World Series, [and] they just turn out to be a good team, and then they get caught cheating, [then] probably not, right? And so, several insights. So, long story short. I would say [it] gives us an opportunity to study the way people behave. It gives us in particular how people make choices when it comes to cheating [and] what the marginal benefits in this case are to cheating. You know, a really cool follow-up paper would be, you know, to talk about how the detection of it worked. There's a long winding story about how this got unraveled. I started this by saying [that] Mike Fire said: well, you know, when it, sort of, outed them. And everybody that's an Astros fan says: oh, Mike Fire sucks. And he only breaks the story after it no longer benefits him. And you and I, kind of, nod our heads and go yeah. I mean, there's probably some truth to that, all right?

Mattson: Yeah. Yeah. All right. Our guest this episode has been Dr. Lee Stitzel. Thank you for joining us on the EconBuff Podcast. This is Ryan Mattson, filling in for Dr. Lee Stitzel who will return as host for the next podcast. Thank you all for listening and good luck.