An exploitable mispricing disappears once the method for finding it becomes public.
Named for Lewis's 2003 book. Once on-base percentage was public, its price rose and the Athletics' advantage disappeared — a concrete case of the Grossman-Stiglitz paradox and a cousin of Goodhart's law.
In practice
- A recruitment firm's edge in sourcing from one platform disappears the year its competitors read the same case study.
- A trading strategy published in a well-read paper stops working within about eighteen months of publication.
- Standing
- A concrete case of the Grossman–Stiglitz paradox and a cousin of Goodhart's law.
- Subject
- Sport & Performance
- Essay
- The best-measured contests there are