Jose Mourinho vs methodological individualism

Jose Mourinho yesterday issued a challenge to methodological individualism. When asked about Diego Costa, he replied (15'30" in): "I like my team more than my players."

This is a very reasonable attitude to have to a team that includes John Terry and Diego Costa. But it expresses an important truth - that collective entities can have a property (likeability) that its component individuals do not.

This corroborates something I've said before. The most successful football managers have a collectivist mentality: the decline of British football managers and rise of individualism might be related.

But there's another point here. Mourinho's paradox applies widely.   

In football, for exmaple, good individual players do not add up to a good team; think of England in the 00s. Conversely, mediocre individuals can make a decent team; Stoke have achieved mid-table respectability despite have several players who refute the hypothesis that Neanderthal man has gone extinct.

The same is true of financial markets. Sometimes, rational individuals can produce a market than looks irrational*.This happens if rational but ill-informed traders chase noise, or in beauty contest-type behaviour, where individuals worry that others will worry. And conversely, experiments in agent-based economics show us that stupid individuals can produce rational markets. "Mr Market" is a misleading metaphor.

The same can be true in other contexts.Granovetter's riot model (pdf) shows us that violent disorder can emerge not because all individuals are violent but simply if large numbers imitate a few others. Adam Smith's invisible hand theory says that a benign social order can emerge from individual self-interest. Marx's theory of exploitation shows how Christian Victorian gentleman can produce a viciously inegalitarian economy. Schelling's spatial segregation model shows how ethnic segregation can happen even if people aren't especially racist. And I suspect that non-sexist individuals can also generate a patriarchal society.

All these are examples of what Mourinho said - that aggregates can have properties which individuals do not. This can happen - as in my examples - because of emergence. Or - as in Mourinho's case - it can happen because a coach consciously shapes a team. And in other cases, it might be a mix of the two: Irving Janis's examples of groupthink, I suspect, arise partly from bad luck and partly bad leadership.

All this is a challenge to methodological individualism; what's the point of studying individuals' motives and rationality if these are not necessarily related to social phenomena?

I suspect the question can be answered. Careful studies of actual individual behaviour, for example, can tell us how prone they are to the sort of peer effects that can cause aggregate fluctuations or mispricing. And they can also help in the design of better incentive mechanisms: they show us, for example, that big financial incentives can backfire.

I don't have conclusive answers here. My point is rather that, not for the first time, football managers have done a better job of drawing our attention to big issues of social theory than so-called serious thinkers.

* I'm glossing over the question here of whether we can apply descriptions of individuals (such as rational or irrational) to impersonal things. 

Comments

[Matt Moore]

Good post.

It occurs to me that this is not unrelated to Bastiat's parable of the broken window - the individual effect of the glazier's enrichment is noted, but the aggregate effect of disperse wealth destruction is ignored.

One problem with moving away from individualism is that aggregation brings a host of other, and probably more serious problems. Once we suppress the individual, we start to forget to whole point of the endeavour (to improve people's lives) and start to worry about raising aggregates.

A focus on the links between individuals is normally enough to take into account the effects you suggest (peer effects, institutional effects), without focusing on a blob.

* Impersonal things, such as markets cannot be irrational. Similarly impersonal things such as the emergent distribution of income, cannot be immoral. Only individuals can act rationally or morally.

[John_John_33]

The fact that "collective entities can have a property (likeability) that its component individuals do not" is actually consistent with complex methodological individualism, as explained by the most important sociologist of this field: Raymond Boudon. Indeed, individuals acting under limited, strategic rationality (i.e. for reasons that are legitimately theirs but that can be circonstancially mislead) spawn "composition effects" that may turn out to produce "perverse effects" (Boudon, Effets pervers et ordre social, Paris, PUF, 1977) contrary to the initial goal of the action; Boudon analyses specifically the example of financial panics in this light. These phenomenons are often also understandable under the ligh of mimetic desire (Girard) and its resulting imitation behaviors.

One thus does not need to disregard the individual, only entity capable of agency and conscious thinking, to analyse complex, macro-level phenomena. (And for the little story, from this insight, Boudon and his students went on to debunk most of the politically-motivated-but-scientifically-unsound work of his great nemesis: Bourdieu, which greatly pissed off the structuralist, heavily left-leaning French intelligentia who then "preferred being wrong with Bourdieu than being right with Boudon", to their own admittance).

[Giuseppe]

"The most successful football managers have a collectivist mentality".

Unlike most of the post, which is speculative and links to theoretical modeles that are mostly nontestable, this is an empirical statement. If a database of football compensations is available, one could try to identify a relationship between team performance (which is easily measured) and compensation dispersion (which proxies well the orientation of management toward superstars or team players), controlling for average level of compensation.

There is a direct corrispondence to firms, of course. For firms, this empirical study (http://www.tandfonline.com/doi/abs/10.1080/00036840500142101?journalCode=raec20#.VLvQp0fF_-Q) contradicts your hypothesis. I would expect the results for sports teams more conclusive though, since a sport team is a simpler entity than a firm

[Dave Timoney]

Mind you, this could just be an example of Mourinho's eccentric English. What he might have meant is "I like my team more than my players do". They do look remarkably glum when interviewed.

[chris]

@ Giuseppe - this paper is relevant:
https://ideas.repec.org/p/hbs/wpaper/12-075.html
"high pay dispersion has a detrimental impact on team performance"

[Donald]

"think of England in the 00s."

Ahahahaha!

This is example of so many of the biases you (quite rightly) draw our attention to on here.

Group think, bubbles (a la Westminster), media driven hyper realities (see best league in world)... etc-and-so-on.

Lots of love, Scotland (at least we know we're shite)

[rogerh]

IMHO it take a lot of courage and maturity for a manager to seek a collective view and really involve the team. Not often seen and possibly inhibited by peer pressure from above. The necessary confidence and experience may only come long after the manager has moved up the ladder. Slow down the promotion of managers?

[Giuseppe]

Thanks for the link. There is enough literature out there to attempt a survey.
This is the link to the final version of the paper, btw:
http://www.ncbi.nlm.nih.gov/pubmed/25397615

Consider also this: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1710080

The results seem not very conclusive. Bucciol's et al for example find a negative dependency or a weak positive one depending on the definition of team; Franck and Nuesch find a U-shaped relationship. The paper I initially linked to finds a positive relationship. The only point in common among all papers is that the relationship is not very strong.

I would not state as a given that "The most successful football managers have a collectivist mentality". I believe that there are important and non-quantifiable aspects related to culture that are not modeled.