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Just in time for the baseball season, check out J.C. Bradbury’s Hot Stove Economics [2]. It’s a very nice application of economics to baseball and is written with great clarity and insight. The book opens with why it made sense for the Braves to trade Kevin Millwood, an apparent star, in exchange for Johnny Estrada, an apparent failed prospect. I found it quite illuminating particularly because it showed how the standard explanation for these kind of trades may often (always) be wrong. The standard explanation is that because everyone knew the Braves wanted to trade Millwood (for various financial reasons that Bradbury explains), the Braves were at a terrible bargaining position. So of course the best they could do was to get Estrada. Bradbury shows that the bargaining position had little to do with it–Millwood just wasn’t worth that much, contrary to what most casual fans would think.