Kobe Bryant was recently fined $100,000 for making a homophobic comment to a referee.  Ryan O’Hanlon writing for The Good Men Project blog puts it into perspective:

  • It’s half as bad as conducting improper pre-draft workouts.
  • It’s twice as bad as saying you want to leave the NBA and go home.
  • It’s just as bad as talking about the collective bargaining agreement.
  • It’s twice as bad as saying one of your players used to smoke too much weed.
  • It’s just as bad as writing a letter in Comic Sans about a former player.
  • It’s just as bad as saying you want to sign the best player in the NBA.
  • It’s four times as bad as throwing a towel to distract a guy when he’s shooting free throws.
  • It’s four times as bad as kicking a water bottle.
  • It’s 10 times as bad as standing in front of your bench for an extended period of time.
  • It’s 10 times as bad as pretending to be shot by a guy who once brought a gun into a locker room.
  • It’s 13.33 times as bad as tweeting during a game.
  • It’s five times as bad as throwing a ball into the stands.
  • It’s four times as bad as throwing a towel into the stands.
  • It’s twice as bad as lying about smelling like weed and having women in a hotel room during the rookie orientation program.
  • It’s one-fifth as bad as snowboarding.

That’s based on a comparison of the fines that the various misdeeds earned. The “n times as bad” is the natural interpretation of the fines since we are used to thinking of penalties as being chosen to fit the crime.  But NBA justice needn’t conform to our usual intuitions because this is an employer/employee relationship governed by actual contract, not just social contract.  We could try to think of these fines as part of the solution to a moral hazard problem. Independent of how “bad” the behaviors are, there are some that the NBA wants to discourage and fines are chosen in order to get the incentives right.

But that’s a problematic interpretation too.  From the moral hazard perspective the optimal fine for many of these would be infinite.  Any finite fine is essentially a license to behave badly as long as the player has a strong enough desire to do so.  Strong enough to outweigh the cost of the fine.  You can’t throw a towel to distract a guy when he’s shooting free throws unless its so important to you that you are willing to pay $250,000 for the privilege.

You can rescue moral hazard as an explanation in some cases because if there is imperfect monitoring then the optimal fine will have to be finite.  Because with imperfect monitoring the fine cannot be a perfect deterrent.  For example it may not possible to detect with certainty that you were lying about smelling like weed and having women in a hotel room during the rookie orientation program.  If so then the false positives will have to be penalized.  And when the fine will be paid with positive probability even with players on their best behavior you are now trading off incentives vs. risk exposure.

But the imperfect monitoring story can’t explain why Comic Sans doesn’t get an infinite fine, purifying the game of that transgression once and for all.  Or tweeting, or snowboarding or most of the others as well.

It could be that the NBA knows that egregious fines can be contested in court or trigger some other labor dispute. This would effectively put a cap on fines at just the level where it is not worth the player’s time and effort to dispute it.  But that doesn’t explain why the fines are not all pegged at that cap.  It could be that the likelihood that a fine of a given magnitude survives such a challenge depends on the public perception of the crime .  That could explain some of the differences but not many.  Why is the fine for saying you want to leave the NBA larger than the fine for throwing a ball into the stands?

Once we’ve dispensed with those theories it just might be that the NBA recognizes that players simply want to behave badly sometimes. Without that outlet something else is going to give.  Poor performance perhaps or just an eventual Dennis Rodman.  The NBA understands that a fine is a price.  And with the players having so many ways of acting out to choose from, the NBA can use relative prices to steer them to the efficient frontier.  Instead of kicking a water bottle, why not get your frustrations out by sending 3 1/2 tweets during the game? Instead of saying that one of your players smokes too much weed, go ahead and indulge your urge to stand out in front of the bench for an extended period of time. You can do it for 5 times as long as the last guy or even stand 5 times farther out.

Not surprisingly, all of these choices start to look like real bargains compared to snowboarding and impoper pre-draft workouts.