Journal Archive

Volume 39, Issue 3, 2009

(Special Issue, Economics of Sports)

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Articles:

I POLICY DEBATES AND CONTROVERSIES II RECENT TRENDS IN ECONOMIC RESEARCH

IIII BOOK REVIEWS

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Economics of Sports: A Note to this Special Issue

Benno Torgler

Pages: 333-336

First Paragraph:
The expansion of economics to other spheres of life, including politics, war, crime, religion, or in particular sports can be seen in line with Hirshleifer (2002) as a breath of fresh air in economics. Although one can always criticize the generalizability of results developed with sports data, sporting events can still be seen as economic (miniature) environments. There is no reason not to acknowledge that athletes, for example, behave according to two key elements in economics, namely incentives and constraints. Focal economic concepts such as prices, opportunity costs or property rights can be nicely investigated in sports markets and are supposed to drive the behaviour of their key actors. An essential strength of sports events is the fact that they take place in a controlled environment generating therefore outcomes that come very close to holding other things equal, providing therefore a real-world laboratory for testing economic theories. Researchers have the chance of working with highly reliable data (low variable errors) and reduced omitted variables biases. The advantages can be visualized using the Tour de France as an example. The ranking of a cyclist at the Tour de France, his performance in the mountains or the time trials are clearly observable and are free of discrepancies compared to well known and often used traditional economic variables such as GDP or CPI. Statistics can be adjusted based on the outside conditions (stadium, weather conditions etc.). A Tour de France takes place in a controlled environment. All riders perform in the same terrain at the same time with the same outside restrictions such as the weather.

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Interacting with WADA, IOC, UCI and ASADA: A Cycling Australia Perspective

Graham Fredricks, Shayne Bannan, and David T. Martin

Pages: 339-340

First Paragraph:
Ten years ago the World Anti Doping Association (WADA) was formed. Under the leadership of Dick Pound this organisation aggressively formed collaborations with national anti-doping agencies such as the Australian Sports Anti-doping Authority (ASADA) and International Sport Organisations such as the Union Cyclist Internationale (UCI). Of critical importance was the direct link between WADA and the International Olympic Committee (IOC) which led to financial support and leverage when interacting with many popular Olympic sports. WADA rapidly become a world-wide agency with 35 analytic laboratories located in 32 different countries. Some have estimated that in addition to important athlete education programs, WADA have been responsible for more than 1.2 million blood and urine tests of sportsmen and women over the past 5 years. WADA also pours millions of dollars into scientific research every year in their ongoing attempt to deter athletes from using illegal ergogenic aids.

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Sports Rules As Common Pool Resources: A Better Way to Respond to Doping

Edward Castronova and Gert G. Wagner

Pages: 341-344

First Paragraph:
In sports, as in all other fields of human life, there are written rules and then there are unwritten
rules. An example of the former in soccer is the offside rule: a pass only is legal if at least two
defenders are between a pass-receiver and the goal when the pass is made. An example of the
latter is what might be called the “Injury Truce”: if team A has an injured player and kicks
out of bounds in order to stop play for medical treatment, after the time out team B kicks out
of bounds itself to return possession to team A.

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Doping and Fair Play

Nicolas Eber

Pages: 345-347

First Paragraph:
The conventional approach to the economic analysis of doping in sport is that athletes are typically involved in a Prisoner’s Dilemma-type interaction (Breivik 1987, Bird and Wagner 1997, Eber and Thépot 1999, Haugen 2004).1 The idea is straightforward: doping being a dominant strategy (i.e., yielding a preferred outcome regardless of the strategy used by the competitor), each athlete finds it optimal to take drugs; this results in a situation of generalized doping although each athlete would be better off in a dope-free world.

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Pecuniary Disincentives in the Anti-Doping Fight

Wolfgang Maennig

Pages: 349-351

First Paragraph:
Most delinquent activities can generally be regarded as a choice made by an individual in the face of a number of legal and illegal alternatives for action, whereby the course of action chosen promises the greatest expected net utility for the individual at the time of the decision (Becker 1968). In the case of doping, the respective microeconomic calculation (Maennig 2002) makes it possible to simultaneously take into account a number of behavioural determinants such as additional sporting honours, additional income, moral qualms and short and long-term health risks.

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The Basic Economics of Match Fixing in Sport Tournaments

Raul Caruso

Pages: 355-377

Abstract:
Match-fixing is a recurring phenomenon of sport contests. This paper presents a simple formal model in order to explain them. The intuition behind is that an asymmetry in the evaluation of the stake is the key factor leading to match-fixing or to tacit collusion. In particular, it will be demonstrated that an asymmetry in the evaluation of the stake can lead to a concession from one agent to the other and then to a match-fixing. It is also demonstrated that when the asymmetry in the evaluation is extremely large there is room for tacit collusion. Eventually the intuitions and results of the model will be applied to make a comparison between the FIFA World Cup and the UEFA Champions League tournaments

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Are Demographic Diversity Effects Spurious?

Stephan Nüesch

Pages: 379-388

Abstract:
The substantial literature on the relationship between demographic diversity and team performance yields weak and/or inconsistent results. Using match-level data of all games played in the German soccer league Bundesliga over six seasons, this paper analyzes age, race and tenure diversity of the fielded team under different model specifications to test the robustness of demographic diversity effects. The empirical results reveal that the correlations between demographic diversity and the outcome of the game are confounded by mean values of the demographic attributes and contextual covariates.

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Who Is The Best Formula 1 Driver? An Economic Approach to Evaluating Talent

Reiner Eichenberger and David Stadelmann

Pages: 389-406

Abstract:
Who is the best formula 1 driver? Until today it was impossible to answer this question because the observable performance of a driver depends both on his talent and the quality of his cars. In this paper, we for the first time separate driver talent from car quality by econometrically analyzing data covering 57 years of Formula 1 racing. Our estimates also control for the number of drivers finishing, technical breakdowns and many other variables that influence race results. While Michael Schumacher is often believed to be the best driver, he is overtaken by Juan Manuel Fangio and Jim Clark.

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Towards a New Dynamic Measure of Competitive Balance: A Study Applied to Australia’s Two Major Professional ‘Football’ Leagues

Liam J. A. Lenten

Pages: 407-428

Abstract:
A new measure for competitive balance between seasons is proposed, which takes the form of a mobility gain function, based on each team’s win ratios from the current and previous seasons. This ‘dynamic’ function measures competitive balance within a oneperiod change framework. While it is not suggested that this measure replace useful existing within-season measures, such as the widely used actual-to-idealised standard deviation (ASD/ISD) ratio, this measure does overcome one of the shortcomings of within-season measures – that is, the ability to pick up uncertainty of outcome from season to season, rather than merely from round-to-round. Hence, it is suggested that this measure could be used in conjunction with within-season measures in time-series analysis. An application to Australia’s Australian Football League (AFL) and National Rugby League (NRL) over a century of data reveals numerous interesting comparisons.

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The Dynamic of Bicycle Finals: A Theoretical and Empirical Analysis of Slipstreaming

Alexander Dilger and Hannah Geyer

Pages: 429-442

Abstract:
The finals of bicycle races have certain peculiarities compared to other sports. The leading group in a bicycle race rides comparatively slowly until one of the competitors tries to shake off his opponents. Only then do all riders perform to the limit. This raises the question of who takes the thankless early lead and why. The rider who is in front just before the final sprint is seldom the one who wins. The relevant physics and their implications for sport economics are analysed and tested empirically.

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Comparing Batsmen Across Different Eras: The Ends of the Distribution Justifying the Means

H. Shelton Brown, III

Pages: 443-453

Abstract:
The debate over the quality of modern batsmanship in cricket parallels the debate over the disappearance of the 0.400 hitter in baseball. This paper shows that the best batting averages in cricket, which are in the right tail of the distribution of all batting averages, have declined. This does not imply poorer batting skills. The batting average actually measures batting skill in relation to bowling and fielding skills, the latter of which, it is argued, have improved over time. Therefore, by mistakenly interpreting the batting average as an absolute measure of batsmanship, cricket experts and fans under-appreciate the skill of modern batsmen. The paper attempts to make a meaningful comparison of modern batsmen to non-modern batsmen through use of the Z transformation. Both decadal standard deviations and coefficients of variation reveal wider variations in batting averages in previous decades, especially the 1940’s.

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Stakes and Motivation in Tournaments: Playing When There is Nothing to Play for but Pride

Lionel Page and Katie Page

Pages: 455-464

Abstract:
Tournaments are an effective means of incentivising participants to ensure an optimal level of effort. However, situations can occur in tournaments where the final outcome of a given competitor does not depend on his/her future performance. Specifically, we study these specific situations in a data set of the group stages of European football club competitions from 1992 to 2009. We identify situations where teams are already sure to finish either first or last at the penultimate stage in the group. We show that such situations affect team performance in the last match, typically decreasing the performance of a team sure to finish first and increasing the performance of a team sure to finish last. The first finding is in line with the economic predictions yet provides interesting implications, namely that the schedule of the match order plays a significant role in the overall performance of the team. The second, counter-intuitive, finding is not well accommodated into the existing economics framework and thus we discuss two alternative explanations, one based on social pressure and the other on pride.

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Book Reviews:

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