| Abstract: |
Recent models and empirical work on network formation emphasize the importance
of propinquity in producing strong interpersonal connections. Yet, one might
wonder how deep such insights run, as thus far empirical results rely on
survey and lab-based evidence. In this study, we examine propinquity in a
high-stakes setting of talent allocation: the Major League Baseball (MLB)
Draft. We examine draft picks from 2000-2019 across every MLB club of the
nearly 30,000 players drafted (from a player pool of more than a million
potential draftees). Our findings can be summarized in three parts. First,
propinquity is alive and well in our setting, and spans even the latter years
of our sample, when higher-level statistical exercises have become the norm
rather than the exception. Second, the measured effect size is important, as
MLB clubs pay a real cost in terms of inferior talent acquired due to
propinquity bias: for example, their draft picks appear in 25 fewer games
relative to teams that do not exhibit propinquity bias. Finally, the effect is
found to be the most pronounced in later rounds of the draft (after round 15),
where the Scouting Director has the greatest latitude. |