Is the NBA fixed?

Tim Donaghy, the ref who was caught gambling, says it is.  Here’s a good deal of evidence that it isn’t.  Small market teams do well in the draft and reach the Finals at a high rate. 

Yet I haven’t seen any MSM source, at least not in the context of these allegations, which admits the obvious: star players get favored treatment from the refs.  And this equilibrium is self-sustaining without any direct instructions from the Commissioner.  As a ref, you know you are expected to allow offensive fouls from LeBron James, the crowd expects it, other refs act that way, and you are never reprimanded for the non-calls.  So in at least this one way the NBA is clearly fixed and by the demand of the fans, even if they do not prefer to think of it as such.

But now imagine a nervous ref who wonders — if only with p = 0.2 — whether the NBA wouldn’t prefer to see the Los Angeles Lakers beat Sacramento and move on in the playoffs.  That same ref knows about the convention to favor star players.  And hey, the Sacramento team in those days didn’t in fact have any real stars.  What inference should you draw and how should you behave in your calls?

If the NBA has been tolerating at least one (and surely more) crooked ref, it is unlikely that other ref pathologies have been absent as well.  Toss in the $50 billion or so a year bet on NBA games and maybe you have some real action.

So it’s hard to avoid the conclusion that the NBA is at least partially fixed, although not necessarily in the conspiratorial sense that many people might be expecting.

Here is what a professional gambler thinks.

The point taken from economics is that there are many ways of enforcing implicit collusion, not to mention that at some margin gains from trade do kick in.  If wealthy CEOs will cheat, why won’t NBA refs?