When I was informed of the Allen Iverson trade, I immediately felt that it was a colossal misallocation of resources for the NBA and basketball fans. Iverson is going to go to Denver, take shots away from Carmelo Anthony and likely stunt his development as a franchise player. Meanwhile, for their future hall-of-famer (Iverson), Philadelphia received a 30 year-old point guard that's out of shape (Andre Miller), a 31 year-old career bust (Joe Smith) and a couple of mediocre draft picks. Could this trade have made both terms worse (especially after the honeymoon periods expire)?
Even if I'm wrong about this trade, it did remind me of the possibility that self-maximizing actors can engage in trades that render both worse off, although the actors (which notably included Sixers GM Billy King, who is known as one of the worst GM's in professional sports) who made these economic decisions thought differently and think they're better off today, obviously, and that's what economists would probably retort.
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