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| https://www.thesportster.com/basketball/15-recent-nba-trades-that-almost-happened/ |
The economic principle I’m exploring is “People gain when they trade voluntarily”
My research question to help me study the economic principle is “How do teams decide on trades and what do they assess in a player when deciding on a trade?”
demonstrates this economic principle because it discusses the specific factors that teams look for and what exactly makes them “valuable”, and gives specific examples of teams that have benefited from trades.
First, the article discusses the specific things that teams look for in a player when making a trade. There are many things that teams consider, but some of the most obvious, the article states, are: how the player fits in with the personnel and coaching staff, the team’s plan and overall direction for the future, how the team’s chemistry could be affected by the trade, and the player’s contract in relation to the payroll and the aforementioned plan. These are among the most important factors when making trades and are often looked at more than talent or skill. As mentioned in the previous blog post, things such as talent, skill, athleticism, and IQ are primarily evaluated when drafting players, rather than trading. The obvious explanation for this is because the players involved in the draft have no lasting reputation/fame, whereas players who have been in the league for a longer time are more well-known and therefore teams can better assess their projected salaries, tendencies, personalities, ability to work with a team, overall contribution, and other likewise things.
The article stresses how it is situational for each team. Every team in the NBA has a different situation; some might be in a rebuilding phase, some might be trying to make the playoffs, and some might be in between. If a team wants to win the playoffs, then they are unlikely to make any trades during the season. This is because given that they are trying to win the playoffs, it can be implied that they already have a good foundation and do not need to do any rebuilding. Therefore, the smartest option is usually to avoid trades since the current roster has already been on the team for a long time and is well-accustomed to the team’s personnel, playbook, tendencies, etc. Acquiring new players is always a risk because it takes time for them to fit in with the team. Vice versa, if a team was in a rebuilding phase and was not focused on winning the playoffs that particular year, they are likely to make more trades and try to put together the best roster that they possibly can so that their chances of winning playoffs in the future will be significantly higher.
Lastly, when making trades, teams look at what particular skills they lack and what areas of improvement they need to focus on the most. If a team has a very strong offense but lacks defense, they might trade one of their most talented players in exchange for 2 or 3 quality defensive players, most likely with a team in the opposite position who has a strong defense but needs better offensive players. For example, the Minnesota Timberwolves have one of the highest valued players in the league, Jimmy Butler, who is known for his outstanding skills on offense. However, the Timberwolves are also ranked second to last in defensive ratings, which is their biggest weakness as a team. Therefore, it might be beneficial to trade Butler for 2 or 3 good players on the Spurs, who are one of the best defensive teams in the league. This would be a perfect example of a voluntary trade, which is the key economic principle involved in this particular topic. The Timberwolves would benefit as they still likely have a good offense (given that their offense doesn’t revolve around Butler), but now have a much more refined defense, which was their biggest area of improvement. Likewise, the Spurs would benefit as they aren’t losing much of their defensive foundation in exchange for one of the most talented offensive players in the league. The benefits would outweigh the costs for both teams; they are only losing a small portion of their strength in exchange for a large boost to their weakness.
In my next blog post I will research: How do teams decide when to rebuild and how do they do it?
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