FBM Musings: When Research Becomes the Bias

Economic Hit Men, Incentives & Fantasy Baseball

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John Perkins had one job in the 1970s: produce growth projections for developing nations so optimistic they justified massive loans for infrastructure. The numbers weren’t meant to be right — they were meant to persuade.

I was reading Perkins’ story in Confessions of an Economic Hit Man during some late-night reading, and it got me thinking. Perkins knew his forecasts were inflated. His employers knew. But the goal was never accuracy, it was closing the deal.

He eventually blew the whistle, but the mechanism — forecasts shaped by the forecaster’s incentives rather than truth — lives on. And I believe that it creeps into our fantasy baseball draft prep.

The Incentive Bias

Charlie Munger, Buffett’s late partner at Berkshire Hathaway, called this “incentive-caused bias” — what he considered one of the most powerful forces warping human decision-making.

When incentives align a certain way, we see the world that way — often without realizing it. It doesn’t feel like lying; it feels like conviction.

Warren Buffett has a quote that fits nicely with this: “Never ask a barber if you need a haircut.” The barber doesn’t think he’s lying when he says you need a trim. He sees shaggy hair because his livelihood depends on seeing shaggy hair.

Making a Choice or Following a Choice?

Perkins wrote something else worth thinking about:

“The coincidences of your life, and the choices you have made in response to them, have brought you to this point.”

He meant it on a grand scale. But it describes your draft prep with uncomfortable precision.

Think about the breakout candidate you’re highest on right now. You spent three weeks researching him in February. But the path to that conviction wasn’t a controlled study. It was a series of coincidences — which article showed up in your feed, which podcast you happened to listen to that week, which Statcast clip got quote-tweeted into your timeline — and the choices you made in response.

You followed those threads and skipped others. That particular path built your projection. And now it feels like research, when really it was shaped as much by what you stumbled into as by what you sought out.

Here’s the question Munger would ask: is that projection more accurate than the field’s, or does it just feel more accurate because you’ve invested time and identity into it?

Just as Perkins inflated forecasts to enable loans (and secure his paycheck), we inflate ours to justify our “cognitive capital.” The incentive? Consistency. Downgrading a player after all that effort feels like admitting waste, so the numbers nudge upward. Not from data, but from our need to match input with output.

Confirmation Bias

Every year, there’s a player the industry falls in love with during draft season. The breakout everyone is projecting in unison. That collective conviction makes it even harder to ask whether you arrived at your number independently or just absorbed everyone’s enthusiasm.

Fantasy managers are susceptible to confirmation bias, seeking out information that supports the decision they already want to make. A positively worded tweet can tip the scales toward the player you’ve already mentally committed to, while a well-researched cautionary piece gets dismissed. You combine that confirmation bias with Munger’s incentive-caused bias, and now you’ve got a forecasting machine that’s rigged from the inside.

How to Solve It

So what does a process-driven manager do?

First, separate research from projection. Grind the research, then step away before assigning values. That buffer detaches emotional investment from cold math — unlike Perkins, who warped numbers in the same breath as gathering data.

Second, seek out the dis-confirming case. Munger was a devotee of inversion. Instead of asking “Why will this player break out?”, ask “What must go wrong for my projection to flop?” If you can’t answer that clearly, you haven’t finished the research. You’ve only finished the half that feels good.

Perkins’ projections were designed to serve an agenda. Yours don’t have to be. But only if you recognize that every manager is, to some degree, an economic hit man lobbying for their own prior beliefs.

Reflection

Pick a player you’re high on. If you saw his profile cold today, sans your research, would your projection match? If not, there’s the bias. Acting on that insight? That’s your edge.

Thanks for reading.

Take care.