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Sports, by numbers

An Economist in the Game: How to Throw in $580 Million and Other Surprising Insights from Sports Economics

by Paul Oyer, Yale University Press, 2022

When Oakland Athletics general manager Billy Beane sat down to talk to writer Michael Lewis and describe how he had turned a weaker team into playoff regulars, the book’s chances resulted, Moneyball, being made into a Hollywood movie starring Brad Pitt as Beane must have been very small. But that’s the problem with sports: weird, sometimes inexplicable events happen all the time. Lewis’ research on Beane has spawned a genre of nonfiction fiction in which economists and scientists try to apply their analytical skills to the vast amounts of sports data to explain. how the game actually works. Other foundational works in the micro-genre include Simon Kuper and Stefan Szymanski’s Football (2009) and David Epstein Sports genes (two thousand and thirteen).

An economist in the game, by Stanford Business School professor Paul Oyer, is a newcomer to the field. Oyer uses his experience in labor economics to examine some of the key narratives surrounding the sports industry, including doping, ticketing, discrimination, wages, legalization of betting and gambling. the wisdom (or otherwise) of a city hosting a major sporting event, such as the Olympics or the World Cup. These are hot topics in the boardrooms of professional sports teams, federations and governing bodies, but also topics of interest to economic theory, as many of the stories about real sports are real. makes perfect sense when viewed through the lens of economics.

Oyer’s best example of the sport’s economic angle is the seemingly unlikely dominance of the Korean women’s golfer, who has won 22 of the 43 major titles in the Golf Association. female professional during the last nine years. The mystery here is why a country that doesn’t seem to have a particular advantage in golf, especially when compared to countries with a long history of the sport, become so good at producing world-class players. Oyer’s theory seems unlikely, but he convincingly argues that the factors appear to be unrelated – Korea’s unusual combination of a very wealthy population with a high saving rate, children unhappiness (those who have a particularly hard time achieving academic success) and widespread gender inequality – combine to underpin the ideals of success in golf. Dense education makes Korean girls unaffected by the work required to become professional athletes, but the gender pay gap discourages girls from pursuing academic careers. passionate like the boys. And the girls’ families likely have the resources to help them afford golf equipment. Additionally, Koreans have been a strong role model for former professional golfer Se Ri Pak, who Oyer believes has influenced Korean girls like former tennis player Martina Navratilova entices Czech girls to hold racquets.

Even for a sports fan, it’s hard to argue that a new stadium is more important than more public sector workers, more advanced infrastructure, or cheaper healthcare. .

What elevates? An economist in the game is that Oyer presents its data in a harmonious, balanced manner while drawing firm conclusions. For example, he believes that performance-enhancing drugs (PEDs) have become so dominant in sport that they are essentially indivisible from it, largely because doping makes economic sense to athletes. athletes. He describes drug use as an example of the prisoner’s dilemma, in a section so well argued that it’s well worth the lengthy quote: “The rider’s best choice cycling (also known as the ‘dominance strategy’) is always taking drugs no matter what the other guy does. If one cyclist uses doping, the other is better off doping because that increases his chances of winning from almost zero to fifty. If one cyclist is not doping, the other is better off doping as it increases his chances of winning from 50 to almost 100%. The only way doping is not a dominant strategy is if the cyclist in question incurs an extremely high psychological cost from lying and cheating. “Given how much doping normalization has become over the past 30 years, it could be argued that this cost has fallen. Oyer is pessimistic about our chances of eliminating doping through testing, which This makes legalization of PED the only option left.In the end, he said, “Sports would still be interesting if PED was allowed.”

This is still a rather heretical view, even if fans are comfortable with other sports aids, such as aerodynamic helmets and running shoes. Oyer has a more conventional view of cities bidding for tournaments and other major sporting events: never mind, in short. As Oyer put it, it was “three weeks of fun followed by years of recession.” There is no economic case for hosting these events, which are often over budget and require facilities that often do not match the needs of the local population. The 2012 Olympics in London, widely regarded as one of the least wasted Olympics, still cost US$14 billion. (This is lower than the $580 million figure in the book’s title, referring to a 2011 NBA labor dispute.) And the idea really falls apart when you consider that bidding for a tournament isn’t just about whether the event turns out. profitable, but is it the best use of money: “The real economic cost of the arena [or event] includes both direct costs and opportunity costs. Any given purchase is worthwhile only if it is the most efficient use of the resources used to create it. Even for a sports fan, it’s hard to argue that a new stadium is more important than more public sector workers, more advanced infrastructure, or cheap healthcare. than.

Oyer also broadly advocates the increasing legalization of sports betting, assuming that a relatively small number of problem gamblers will bet regardless of legality, so the odds are large. Moreover, gambling that adds excitement to the game can also be allowed to take place. However, he bluntly states that gambling to get rich is a waste of time: the advantage held by the house and better gamblers means losses are almost inevitable.

And that’s the impression that can’t be ignored from Oyer’s sober assessment of sport: it doesn’t make much economic sense to pay for new stadiums, gamble or try to quit drugs. The more the sports industry develops and becomes professional, the more it will follow the laws of economics.

Author profile:

  • Mike Jakeman is a freelance journalist and has previously worked for PwC and the Economist Intelligence Unit.

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