Optimism bias likewise provides a useful mode of heuristic analysis by which to gauge decision-making among professional athletes, and how they may not always utilize rational choice. As discussed in Section II, optimism bias reflects the tendency of individuals to assume that general risks do not apply with equal force to themselves. Thus, when contemplating employment opportunities, might professional athletes overestimate the probability of positive outcomes and underestimate the probability of negative outcomes?

Evidence for optimism bias sometimes emerges when professional athletes weigh the relative risk of incentive-laden contracts versus guaranteed contracts, with the former naturally offering greater potential for reward—and loss. For instance, consider the choice of New Orleans Saints’ running back Ricky Williams in 1999 to agree to an eight-year contract worth between $11 million and $68 million, depending upon his capacity to reach certain incentives. At the time, Williams was the fifth overall selection in the 1999 NFL Draft and was negotiating his first NFL contract. As a useful juxtaposition to Williams’ decision-making process, consider that of fellow rookie running back Edgerrin James, who was selected by the Indianapolis Colts with the fourth overall selection and was likewise negotiating his first NFL contract. In striking contrast to Williams’ incentive-laden contract, James agreed to a seven-year contract worth between $44 million and $49 million, with incentives primarily affecting Williams’ potential to void the last year of the contract.

For two players selected at almost the same point in the NFL Draft, the Williams and James contracts appeared of exceptionally disparate values. In fact, performance projections estimated that Williams would earn at least $30 million less than James over the course of the contract. Indeed, for Williams to obtain much of his annual salary, he needed to amass at least 1,600 rushing yards each season, a feat that had only been accomplished by 15 players in the NFL’s 134-year history, and only once by a Saints’ running back in the franchise’s 33-year history. As a result of his apparent “bad gamble,” Williams bore the brunt of considerable ridicule.

In explaining his decision, Williams reasoned that because he believed that he should have been the number one overall selection in the NFL Draft—and thus have warranted a more lucrative contract—the only way for him “to make that kind of money” was to agree to such a heavily-leveraged contract. As to the contract’s seemingly quixotic performance thresholds, Williams appeared undeterred, reasoning that if he performed to his potential, he would readily attain them. Further suggestive of optimism bias, Williams maintained this confidence even after seriously spraining his ankle a week prior to the start of his rookie season. Separately, Williams rationalized the contract by stating that he would use off-field promotional earnings to offset any opportunity costs triggered by unobtainable incentives (without apparently realizing that such off-field earnings would have been available irrespective of contract type).

As predicted by most observers, Williams’ decision proved remarkably unwise. Though he ranked among the top 10 running backs in rushing yards during his first three seasons, he failed to reach most of the onerous performance standards necessary for incentive payment. As a result, he earned far below his market value. This proved most evident in his third season, when despite setting his franchise’s fourth-highest single-season record for rushing yards, and despite being named his team’s “most valuable player,” he earned only $389,000. To put this figure in perspective, consider that thirty-three of his fifty Saints’ teammates earned more that season, or that James—who rushed for fewer yards—earned slightly more than $7 million.

The costly effect of Williams’ optimism bias begs an important question for assessing decision-making among professional athletes: How can player representatives diminish optimism bias and other cognitive biases when their clients seek patently unfavorable terms?

In the case of Williams, a fatal negotiating defect may have existed to prevent such diminishment, as his representative, Percy Miller, had never before represented a professional football player. Indeed, Miller himself appeared the victim of optimism bias, as he dauntlessly assigned the drafting of technical, contractual language to a personal aide who had never before drafted a contract. Nevertheless, more seasoned agents may prove capable in discouraging players from desiring detrimental agreements. In the alternative, and as vividly illustrated by Williams, professional athletes may fail to internalize critical components of the decision-making process, and thus ultimately pursue the non-optimal strategy.