The McCann McPickle
McCann makes this conversation even more interesting because there are two ways to look at his addition.
1. If the Leafs paid Seattle a 7th rounder to select Filip Hallander in the expansion draft, it would have been seen as a genius move. They would have escaped the draft by losing only a B-level prospect with a fairly low chance at being a star.
2. It doesn’t matter what the Leafs paid for McCann. Getting a discount on a player doesn’t change his overall value. Losing McCann for nothing is different than losing just Hallander and a 7th, because you didn’t have to expose him.
This is the kind of Game Theory problem that you can really sink your teeth into, because it’s an interesting exercise (at least to me it is) to try and figure out which version of the final outcome the Leafs should work to achieve.
Think about this: You find $50 on the street. You don’t really need $50, and wouldn’t care if you lost it, so you bet it on an extreme long-shot bet and see what happens. Either you’ll change your life or it will be like you never found $50.
Or think about this: The problem is a kind of reverse of the Sunk Cost Fallacy. The SCF simply means that once you’ve paid the price, that is the cost and whatever happens after is irrelevant. So for instance, the Leafs paid a 1st round pick for Nick Foligno. They should not consider that cost when considering if they want to re-sign him. Or say you buy Jays tickets and then you are sick on the day of the game. If you go just because you already paid for them, you’re making your life worse for no reason. The cost is the cost and whether you actually use the tickets is irrelevant.
So in the case of McCann, the Sunk Cost Fallacy can be reversed. The cost the Leafs paid to prevent losing a player off their roster is a 7th rounder and the (at best) 5th best prospect in the organization. Whatever McCann may or may not have done is irrelevant.
However, that isn’t strictly true, and that is because of Opportunity Cost. If you bet your found money (or your shiny new Jared McCann) you might end up where you were before your found the money (or the McCann) but you still missed out on whatever that money could buy you.
In this case, you’ve got to run a risk vs reward scenario. The risk is actually that you end up with nothing and lose out on whatever $50 could have bought you, and the reward is you hit huge on a long-shot bet.
So regardless of the sunk cost fallacy working in reverse, and regardless of the fact that you would be the same as you were before you found the $50 if you lost it in a bet, to know whether the risk of just betting your found money is worthwhile you have to know what that $50 is worth to you.
How bad to you need $50? Whatever I can buy for $50 I can probably afford anyways, so personally it would makes sense to bet it. But what if I found $5000? Sure, winning 50 K would change my life, but so would eliminating my car payment in one lump sum. There is obviously going to be a point where keeping the money instead of going for a big payday is the right choice.
So back to McCann…