Kevin Love, in his infinite wisdom, decided to test the free agent market. At least for a while, it seemed to raise the possibility that he wouldn’t return to the Cleveland Cavaliers with LeBron James.
Courtside critics of Love frequently cite the Coase theorem, especially when criticizing his play this last year for Cleveland. Arguably Love is a better player on a bad team than he is on a good team. He scores a lot, but only if he is the primary option on offense; you can see this by comparing his numbers on Minnesota, a poor team where he was a big star, with his numbers for Cleveland, where he was the number three scoring option. He needs a lot of touches to hone his shooting, which is a kind of scale effect. He also pulls in a lot of rebounds by neglecting his duties on team defense. For a poor team, maybe that is OK, because the team defense had serious holes anyway. For a good team it can wreck the entire plan.
This situation differs from the traditional O-Ring model (clever link there), in which the lesser talented workers hold the more talented worker back. Here the lesser talented workers allow a flawed, attention-demanding competitor to flourish.
It may sound negative to say a player is more valuable on a bad team, but that is a skill too. These individuals are perhaps no less virtuous or hard-working than those who are better on a good team. Michael Adams was better on bad teams (and he played on lots of them), but was hard-working and non-selfish and also widely admired, even though he was too short and weak to hold the line in a good defensive set-up.
There are analogues in business. Some managers may have special talents in bringing out the best in less talented workers. Or they may make better decisions when they get to be the real boss of just about everything. They may need a lot of unfettered experience to refine their skills, and perhaps they’re not so good at collaboration anyway.
Some politicians may be better at running chaotic countries; Nelson Mandela would have been wasted as Prime Minister of Iceland.
Some economists may be of more value in weak departments than in strong departments. Their generalist skills fill in a greater number of gaps, and perhaps they can bring out the best in weaker students, when better students would find their lack of specialization a bigger drawback.
What are other examples of this phenomenon?
Given that Kevin Love is indeed re-signing with Cleveland, does this mean the knock on him is wrong? Or is the equilibrium that the Cavaliers will become a worse team? Or maybe virtually all players are good bargains the year before the salary cap will go up a lot? Maybe Cleveland re-signed him…because they can? The rumored deal is for $110 million, tell Coase about that.