THE BLOG
11/09/2012 12:41 pm ET Updated Jan 09, 2013

# Does the 'Best' Team Win the World Series?

This post originally appeared on Freakonomics.com.

It's been a few days. And although I ain't over it yet, I think I can write about the Detroit Tigers losing the World Series.

When the playoff in baseball began, 10 teams -- and their fans -- were very happy. But the playoffs being what they are, we knew that only one team -- and its fans -- would actually be happy when the whole thing was over.

After the best-of-five series, the Tigers -- and this fan -- were quite happy. When the Tigers swept the Yankees, I was very happy. And then when the Giants swept the Tigers... OK, I wasn't happy anymore.

So what did the Tigers and all the other "losers" (and yes, that includes the Yankees) learn from the playoffs?

For an answer, let me quote the following from The Drunkard's Walk: How Randomness Rules Our Lives (a wonderful book by Leonard Mlodinow):

... if one team is good enough to warrant beating another in 55% of its games, the weaker team will nevertheless win a 7-game series about 4 times out of 10. And if the superior team could beat its opponent, on average, 2 out of 3 times they meet, the inferior team will still win a 7-game series about once every 5 match-ups. There is really no way for a sports league to change this. In the lopsided 2/3-probability case, for example, you'd have to play a series consisting of at minimum the best of 23 games to determine the winner with what is called statistical significance, meaning the weaker team would be crowned champion 5 percent or less of the time. And in the case of one team's having only a 55-45 edge, the shortest significant "world series" would be the best of 269 games, a tedious endeavor indeed! So sports playoff series can be fun and exciting, but being crowned "world champion" is not a reliable indication that a team is actually the best one. (p. 70-71)

As Mlodinow notes, a seven-game series is not a sufficient sample to identify the "best" team. So that means we are not sure at this point that the Giants are better. And I am not just saying that because the Tigers lost (OK, I probably am just saying that because the Tigers lost).

The idea that the World Series doesn't necessarily identify the "best" team relates to something I said in this forum a few weeks ago: team spending and wins in baseball are not strongly related. In fact, in some years (like 2012) there isn't even a statistically significant relationship between payroll and regular season wins.

But let's imagine for a moment that there is a link between spending and winning. In fact, let's imagine that if you spend enough money you can guarantee that you will have the "best" team in baseball. Would that be enough to guarantee your team a World Series title?

To answer this question, we need to specify what it means to be the "best" baseball team. And here are three ways we can define "best":

1. Winning percentage: This may seem like the most obvious definition of "best."Across a 162 game season the team that wins the most could be thought of as the very "best" team. Then again, we could consider...
2. Pythagorean Win-Loss: Baseball-Reference.com defines this as the expected win-loss record based on the number of runs scored and allowed by the team.
3. Simple Rating System: Baseball-Reference.com defines this as the number of runs per game they are better (or worse) than the average team (average ML team for years with inter-league play and just their league for other years). The specific formula -- which takes into account strength of schedule -- is as follows: SRS = Run Differential (R_diff) + Strength of Schedule (SOS)

With some definitions of "best" in hand, let's look at how often the "best" team has won the World Series. We begin our study in 1969, or the first year more than two teams appeared in baseball's postseason. Specifically:

• from 1969 to 1993, four teams made the post-season.
• from 1995 to 2011 (there was no post-season in 1994), eight teams participated in the playoffs.
• this past season, ten teams were in the playoffs.

Given these definitions, how often has the "best" team won the title?

From 1969 to 1993 -- or across 25 seasons -- here is what we see:

• Top team in winning percentage won the World Series 7 times.
• Top team in Pythagorean Win-Loss won the World Series 8 times
• Top team in Simple Rating System won the World Series 11 times

So no matter how you define "best," the "best" team in baseball failed to win the World Series half the time when four teams made the playoffs.

When we look at the playoffs with at least eight teams, the "best" teams do even worse. From 1995 to the present (across 18 seasons) we see the following:

• Top team in winning percentage won the World Series 3 times.
• Top team in Pythagorean Win-Loss won the World Series 3 times
• Top team in Simple Rating System won the World Series 5 times

Again, being the "best" doesn't seem to guarantee a title. More than two-thirds of the time, the "best" team fails to end the post-season as a very happy team.

So even if a team could increase its payroll and buy the "best" team, the playoffs in baseball are simply not designed for the "best" team to consistently triumph.

And that means teams should be very cautious about responding to what they see in the playoffs. The Yankees inability to win against the Tigers in the American League Championship doesn't necessarily mean the Yankees need to make major changes for next season. Every baseball team -- no matter how it is constructed -- is going to have a bad week once in a while. And if that bad week happens to occur in October, your team will look bad in the playoffs and your fans will be unhappy.

I should add, this was very much the argument Steve Walters (economist at Loyala University and consultant to the Baltimore Orioles) recently made at the Wages of Wins Journal. The playoffs are simply hard to predict. As Steve noted in the videocast, even winning more than 100 games is no guarantee of a World Series title. Across the past 25 years, 20 different teams have finished the regular season with more than 100 victories. And of these, only two managed to win a title.

So the playoffs should be thought of as entertainment. But if you are not entertained because your team lost (the outcome for 90 percent of playoff teams), don't think this "proves" your team isn't the "best". And if your team does win... well, you can think that your team is the "best"; even if the rest of us know this isn't true. And I am not saying that just because my team lost (okay, that's probably not true).