Sunk Costs

added 3/27/2002 by Raymond Desadier
Astros management has done a great job this spring in choosing twenty-four players to start the season with. The only problem is, the roster holds twenty-five players. Potential game blowers such as Chuck McElroy and C.J. Nitkowski have been weeded out but the worst spring performer of all, T.J. Mathews, remains. You see, they have yet to learn the concept of a sunk cost and that is the only thing keeping Mr. Mathews employed.

Yes, sunk cost. I got one of my college textbooks* out of the attic which defines it as, “An expenditure that when made cannot be recovered.” Mathews’ salary will have to be paid and it is too late to prevent that. What can be prevented is the result he will have on a contending team.

The lesson to be learned when dealing with such costs is to cut your losses and move on. The best example my economics professor offered was comparing it to that high school boyfriend or girlfriend who, although you felt like breaking up with, you didn’t want all that time you spent together to be a waste. That time is spent and can’t be recovered – don’t waste any more time because of it. Such is the case with Mathews.

Spring statistics may not mean much, but for a pitcher who had relatively no pressure put on him (it has been said for a month that he had a guaranteed roster spot), he has been just horrendous (8.26 ERA in 14 IP) and against minor leaguers no less. How is he going to do when he faces the big leaguers? Yes Mathews is an experienced veteran and yes he may turn things around when the season comes around, but what if he doesn’t? His past two seasons sure haven’t proven anything (3-4, 5.36 ERA in 97 1/3 IP including the highest ERA in the AL in 2000).

Another concept not yet learned by Astros management: April games count exactly the same as September games in the standings. Last year we won the pennant by one game. What if this year we are one win short because of a TJ Mathews loss? That is not fair to the fans, it is not fair to the organization nor is it fair to Mathews. Bite the bullet and release him now or it may end up costing his salary ten fold.

*Taken from Microeconomics-4th Edition by Robert S. Pindyck & Daniel L. Rubinfeld

Preseason Picks

With the regular season beginning in a few days, several baseball enthusiasts are making their predictions of how the season will unfold. I too have made my prediction for the Central Division in hopes to improve upon last year (I picked the Reds to finish third rather than fifth; other than that I had the teams in order). Here it is:

Cardinals – I’d rather be wrong than a jinx. They look good on paper, but in reality their pitching may flounder and they lack Houston’s depth.
Astros – Everything better go right for the Cardinals or our boys are on top.
Cubs –Adding Clement and Alfonseca has made it close, but not close enough.
Brewers – They’re due to surprise and have the talent to do it.
Reds - Adam Dunn is 2 dimensional (HR & K) and Ego Griffey is not a winner.
Pirates – A recovered Kris Benson and rejuvenated Ron Villone and Kevin Young could get them out of the cellar, but nothing more.

Defending 2001 Central Division Prediction Champ: CNN Player Rankings. I’d love to hear your prediction – maybe you can be the 2002 Champ!

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