Sunday, April 13, 2008
More on Doping
Skip had an interesting post on doping last week that prompted more discussion in the comments. I have been working on several research projects related to the economics of doping for the past year or so (with little to show for it except a paper on last year's WEA program and a folder full of rejection letters, but that's another story). The use of performance enhancing drugs by athletes continues to get quite a bit of coverage in the popular press. The gist of much of the reportage on doping falls into a few predictable categories: (1) the use of performance enhancing drugs by athletes is rampant, or at least more widespread than the general public suspects; (2) the use of these substances is a travesty, scathing indictment of the sorry state of sport, a horrible consequence of the corrosive effect of money on the purity of sport, etc.; and (3) Something Drastic Must Be Done ASAP.
Take, for example, an article in Sunday's New York Times about doping in athletics. Track coach Trevor Graham is going on trial next month on drug and money laundering charges related to doping among world-class sprinters. Point (1) comes out in the first paragraph
From the perspective of economics, much of this seems to miss the interesting parts. We know this: athletes, even at the highest level, have different abilities and all face strong and clear incentives to improve their performance. There is a lot of strategic interaction among athletes, and the compensation system in tournaments skews earnings significantly. Both of these factors amplifiy the consequences of outcomes. And to top it all off, the use of performance enhancing drugs is very difficult to detect, and the regulators and chemists are in an "arms race" that the regulators can't possibly win. Athletes face powerful economic incentives to dope and have easy access to new doping methods that are hard to detect. Under these conditions, many will use performance enhancing drugs, and most will get away with it.
The interesting economic angle relates to the question Rod Fort raised in the comments: "does anybody on the revenue generation side really care?" My answer is no. Event organizers desire absolute quality to increase interest in their events. World records, amazing performances that go well beyond what 99% of the population can do, "the human drama of athletic competition" bit. Sports fans, especially casual sports fans, are primarily interested in extraordinary performances. During the McGwire-Sosa home run race a few years ago, how many people said "I'm not paying attention because they are both on the juice?" Plenty of incentives exist to look the other way on the doping issue on the revenue generation side, but nobody pays much attention to it.
I realize that there are very important cost issues here as well, but I'm just sayin' ...
Take, for example, an article in Sunday's New York Times about doping in athletics. Track coach Trevor Graham is going on trial next month on drug and money laundering charges related to doping among world-class sprinters. Point (1) comes out in the first paragraph
When one of the most successful coaches in the history of track and field goes on trial next month in the long-running federal investigation into doping in sports, lawyers for both sides are prepared to reveal that cheating in track is far more widespread than previously known.Points (2) and (3) are scattered throughout the article, with references to "underside of track and field" and tales of Federal regulators ruthlessly stamping out this scourge.
From the perspective of economics, much of this seems to miss the interesting parts. We know this: athletes, even at the highest level, have different abilities and all face strong and clear incentives to improve their performance. There is a lot of strategic interaction among athletes, and the compensation system in tournaments skews earnings significantly. Both of these factors amplifiy the consequences of outcomes. And to top it all off, the use of performance enhancing drugs is very difficult to detect, and the regulators and chemists are in an "arms race" that the regulators can't possibly win. Athletes face powerful economic incentives to dope and have easy access to new doping methods that are hard to detect. Under these conditions, many will use performance enhancing drugs, and most will get away with it.
The interesting economic angle relates to the question Rod Fort raised in the comments: "does anybody on the revenue generation side really care?" My answer is no. Event organizers desire absolute quality to increase interest in their events. World records, amazing performances that go well beyond what 99% of the population can do, "the human drama of athletic competition" bit. Sports fans, especially casual sports fans, are primarily interested in extraordinary performances. During the McGwire-Sosa home run race a few years ago, how many people said "I'm not paying attention because they are both on the juice?" Plenty of incentives exist to look the other way on the doping issue on the revenue generation side, but nobody pays much attention to it.
I realize that there are very important cost issues here as well, but I'm just sayin' ...
Labels: doping, technology, tournament theory
Wednesday, March 12, 2008
Economics and tournaments
Last weekend Charles Knoeber, Theofanis Tsoulouhas and Tomislav Vukina of North Carolina State organized an excellent conference on the economics of tournaments and contests. The keynote speaker was Ed Lazear, presently chairman of the President’s Council of Economic Advisers and one of the founders of tournament theory. Sixty papers were presented, ten of which were explicitly about sports, and pretty much every speaker I saw mentioned sports as one of the principal applications of contest theory. For anyone interested I recommend browsing the conference webpages, At the risk of offending the presenters of some excellent papers, I thought I’d pick out two that might be of general interest.
First, Mike Maloney from Clemson presented a great paper (joint work with Bentley Coffey) comparing the performance times of horses and dogs at the racetracks. Riders, if not horses, they show, respond to incentives. One interesting piece of evidence is that the variance of times in a race for horses is much greater than for dogs (although it turns out the two species travel at similar speeds), suggesting that riders slack off when they are far behind in race. They argue that bigger prizes are also associated with higher speeds for horses, controlling for ability. In other words, it’s not just that large prizes attract better horses, the jockeys also try harder when there’s more at stake.
Second, Jennifer Brown from Berkeley, showed something similar in relation to golf. The presence of Tiger Woods in a golf tournament is similar to reducing the size of the prize, so dominant is his performance in most tournaments. You may or may not find this amazing, but exempt players (those good enough not to have to qualify) record scores that are about 1 stroke higher when Tiger plays than when he does not. Moreover, non-exempt players (who are extremely unlikely to win) are not significantly affected. The importance of this paper is that it sheds further light on whether prizes are just mechanisms for attracting the best contestants (who always try their hardest) or whether athletes rationally adjust their effort contribution in the light of incentives.
First, Mike Maloney from Clemson presented a great paper (joint work with Bentley Coffey) comparing the performance times of horses and dogs at the racetracks. Riders, if not horses, they show, respond to incentives. One interesting piece of evidence is that the variance of times in a race for horses is much greater than for dogs (although it turns out the two species travel at similar speeds), suggesting that riders slack off when they are far behind in race. They argue that bigger prizes are also associated with higher speeds for horses, controlling for ability. In other words, it’s not just that large prizes attract better horses, the jockeys also try harder when there’s more at stake.
Second, Jennifer Brown from Berkeley, showed something similar in relation to golf. The presence of Tiger Woods in a golf tournament is similar to reducing the size of the prize, so dominant is his performance in most tournaments. You may or may not find this amazing, but exempt players (those good enough not to have to qualify) record scores that are about 1 stroke higher when Tiger plays than when he does not. Moreover, non-exempt players (who are extremely unlikely to win) are not significantly affected. The importance of this paper is that it sheds further light on whether prizes are just mechanisms for attracting the best contestants (who always try their hardest) or whether athletes rationally adjust their effort contribution in the light of incentives.
Labels: tournament theory
