What Investors Can Learn from a Very Alternative Market

From the perspective of an active manager, the promise of behavioral finance is that an understanding of behavior will lead to new exploitable inefficiencies. So far, however, behavioral finance has mainly explained previously known inefficiencies. This article describes a very alternative market in which behavioral ideas have been successfully developed by science and applied in practice. The market is professional baseball, and the active manager is Billy Beane, the general manager of the Oakland Athletics.