Player Tracking, Shot Charts, and the National Basketball Association’s Three-Point Revolution: A Technology-Based Misspecification in a Primary Sport Management Setting?

Neoclassical economics holds that agents use resources to maximize objectives subject to constraints. Behavioral economics allows agents to engage in suboptimal decision making due to a host of cognitive biases. We test these theories in a prominent sport management setting. Many sports teams use management information systems to aid in multistream optimization tasks. We find that National Basketball Association team shot-selection tools—shot charts that do not account for shot-pursuant free-throw scoring—distort characterizations of optimal basketball shot selection (e.g., between two- and three-point attempts). Chart aggregations suggest a substantial, persistent three-point premium—continued gains from increases in three-point shooting volume. Through 2021–2022, teams have undertaken these increases, creating the National Basketball Association “Three-Point Revolution.” Using data science methods, we develop refined shot charts that consider shot-pursuant free-throw scoring. Accounting for this, the National Basketball Association has been in significant and widening three-point dispremium since 2018–2019.