An economist would actually call the decision not to sell the ball completely rational
Over the weekend, New York Yankee Derek Jeter joined a small club of major leaguers to achieve 3,000 hits. But the hit came with a twist: Jeter crushed it deep over the left-field fence for a homer. So unlike most milestone hits that remain within the park, this one was caught by a fan, 23-year-old Christian Lopez. The real shocker: rather than cash in by auctioning off the ball, he gave it back to Jeter. Is he nuts? An economist would say that his decision was perfectly reasonable.
So how much money might the ball have fetched? According to one Bloomberg report, it almost certainly could have been sold for somewhere between $75,000 and $250,000 at auction. What did he get for giving it back to Jeter? The Yankees did show their appreciation. The New York Daily News reports:
In return for his big-hearted gift the Yanks have given the 6-foot-5, 300-pound Lopez, four luxury box seats for every game of the rest of the season, plus the playoffs.
He also got several signed bats, balls and jerseys and a meeting with Jeter - but the sweetest gift was the love Lopez felt from other Yankees boosters.
Business Insider estimates that the seats alone are probably worth about $40,000. But that's still a ways off a possible $250,000 haul. Did Lopez make a huge mistake?
Criticizing Lopez's decision as crazy misses the maxim that "money isn't everything." But more importantly, it ignores an important aspect of basic economics that supports that maxim: utility theory. It teaches that money isn't a person's ultimate goal. Instead, they seek to maximize their personal utility. Think of utility as happiness: while money certainly plays a role in happiness for many people, it isn't all that matters.
Seeing this theory in practice isn't difficult. Different people have different preferences. Imagine two people with precisely the same aptitude for math. One might go to Wall Street and happily make gobs of money. The other might choose to teach high school instead, giving up fortune for a job he or she feels is more rewarding or enjoyable. For some -- if not most -- people, money is only a small part of what defines their happiness.
In the case of Lopez, his personal utility prioritized whatever satisfaction that he would derive by giving the ball back above the monetary benefit that would result from auctioning it off. And that's perfectly rational. In this case, the perks that the Yankees provided may have just been a bonus to Lopez.
To another person, however, giving the ball back might have been completely irrational. For example, a New York Mets fan might have sold the ball. Feeling less allegiance to Jeter and the Yankees, this person might have preferred the money. We can only imagine what a Boston Red Sox fan might have done with it. Perhaps a Yankee-hater would have destroyed the ball out of pure spite.
You could argue that Lopez didn't realize how much the ball could have been sold for, so he might have behaved differently even to maximize his own utility had he known its value. But even now, after we can be certain that several people have informed him of how much money he gave up, he doesn't appear to regret the decision. From the Daily News article:
"I would do it the same way if I had to do it all over again," Lopez said, sipping a beer as he watched CC Sabathia hurl a 1-0 gem. "I've had no second thoughts. It was the right thing to do. I wouldn't change anything."
And why should he? His internal preferences dictated precisely the action he took.
Image: Lopez shakes hands with Jeter. Credit: REUTERS/Ray Stubblebine