Category Archives: Professional sports

NHL’s experiments in hockey

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Michael Giberson

Stephen Dubner at Freakonomics points to a Macleans story on some wild experimentation going on in the National Hockey League: shallower nets, moving the second referee off the ice, moving the face-off circles, three-on-three and two-on-two shootouts, and more. The article said:

The unusual nature of some items tested at the camp reminded Simon Fraser University business professor Lindsay Meredith of the freewheeling “skunk works” divisions that tech companies create to investigate advanced projects. “Any major corporation should have some kind of skunk works—a bank, a university, whatever,” he says. “An enterprise of that size and sophistication would be foolish not to.”

FIFA, you listening?

(Related: an April 2009 story in the Financial Times about an “experiments in business” course taught by Freakonomics co-author Steve Leavitt and John List at the University of Chicago.)

More rule/market design recommendations for international football-soccer

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Lynne Kiesling

Like Mike the other day, I have been thinking about possibly Pareto-improving rule changes in international soccer; like Richard Epstein I have always thought about sports rules (and league organization and market structure) as interesting market design issues. Take, for example, the unintended changes in ice hockey and American football after the introduction of a mandatory helmet rule — an increase in the force and violence of body contact. This is as good an example of moral hazard as you can find outside of Fannie Mae and Freddie Mac.

After the two ludicrous incorrect calls in today’s matches — not calling Frank Lampard’s goal a goal in the England-Germany game, and allowing Carlos Tevez’s goal even though he was ridiculously offside in the Argentina-Mexico game — FIFA’s hidebound refusal to use any sort of technology to review plays and calls is leading to even more anger, acrimony, and charges of unfair outcomes.

I separate the rules issues into two categories: issues affecting the run of play and issues with goals. Epstein’s recommendations that Mike summarized in his earlier post mostly pertain to fouls, diving, and other behavior in the run of play, but I think that the easiest and most beneficial rules changes to implement pertain to goals, not the run of play. A lot of these bad goal calls, one of which we have seen in almost every game thus far in this World Cup, could be corrected with two fairly simple and low-tech rule changes that are cross-pollination from American football:

  • Simple real-time video review of all goals, with the reviewer able to radio down to the referee to tell him that he made the incorrect call. Since the review is in real time, in most cases it should not slow down the pace too much, and you can have a standard rule that if a goal is disallowed the defending team gets a goal kick.
  • From the NFL: A set number of challenges (say 2), restricted to goal-related plays only that will trigger an off-field review and/or referee video review on the field. Somewhat redundant if you have video review, but it gives the teams a clean procedural opportunity to register a disagreement productively, which is impossible given the existing rule structure. As in the NFL, if you register a challenge and your challenge is denied, then there should be some kind of payment, like you lose a substitute or something.

FIFA contends that they do not want video review because it will slow down the pace of “the beautiful game”, and I agree that slowing down the pace is a bad idea. But I think implementing these two rules with respect to goals will reduce the acrimony and ire resulting from bad calls without meaningfully slowing down the game. The existing rules make the game less fun to watch and generate ill will because they lead to unjust outcomes.

UPDATE: Here’s Ross at The Science of Sport making my essential point in more detail. Here’s the money quote:

About two weeks ago, Sepp Blatter was quoted as saying that the introduction of technology into football would detract from the fervour of the sport. He said “Then the science is coming in the game, no discussions, we don’t want that. We want to have these emotions, and then a little bit more than emotions, passion”.  Sepp and FIFA want human error, and so human error they get!

Soccer rules as a market design problem

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Michael Giberson

Hadn’t actually thought of the rules of professional sports leagues as a market design issue before, but Richard Epstein’s column in Forbes proposing rule changes for soccer suggests the idea.  Epstein suggests a couple of changes, drawing on basketball and hockey for inspiration:

  • First, he says goals scored in the run of play be granted two points, like a basketball shot, while penalty kicks remain worth a single point.
  • Second, yellow card and red card infractions should be penalized with time in a hockey-like penalty box.

With soccer the most popular sport in the world, it isn’t immediately obvious that it is in need of reform. Why tamper with all that success?  Yet, Epstein has some good points.  Sometimes a minor foul in the 18-yard box results in a game-winning penalty kick, while a much more serious foul just outside the box leads to a mere free kick.  A red card near the beginning of a match is a much harsher penalty than a red card near the end of the match.

One argument for reform is fairness-based: penalties should be proportionate to the foul committed.  A better line of argument (at least to my way of thinking) comes from market design thinking: what incentives do the rules create, and does the resulting behavior add to or detract from the game?  Consider a striker heading to goal and making slight contact with a defender in the 18-yard box: does the striker take a dive in hopes of gaining the all-but-certain penalty kick goal or shake it off and take a shot in the run of play?  Epstein’s rule change would offer an incentive to the striker to choose athleticism over a theatrical dive, surely an improvement.

Epstein’s proposals may not be the best, but they are worth exploring.  I join him in calling for experiments on the topic!  Let’s see if the rule changes would bring about desirable changes in performance.

Rejoice: another World Cup, another ball controversy

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Michael Giberson

The World Cup is well underway, and with it another controversy over the new ball designed by Adidas for the tournament.  The Wikipedia page on the ball documents some of the complaints, as usual most of them from goalkeepers:

As with the Adidas Fevernova and Adidas Teamgeist at the two previous tournaments, the ball has received pre-tournament criticism, primarily from goalkeepers. Brazil goalkeeper Júlio César compared it to a “supermarket” ball that favored strikers and worked against goalkeepers. Other similar complaints came from Giampaolo Pazzini, Claudio Bravo and Iker Casillas. Italian keeper Gianluigi Buffon said, “it is very sad that a competition so important as the world championship will be played with such an inadequate ball.” whilst Brazilian striker Luís Fabiano called the ball “supernatural”, as it unpredictably changed direction when travelling through the air.

The TeamGeist ball developed for the 2006 tournament was similarly criticized, mostly by goalies.  As it turned out, though, average goals score per match in the 2006 World Cup were down slightly compared to most previous World Cups.

It may be too early in the tournament to jump to conclusions, but across the first 15 games just 24 goals have been scored.  That pace averages to 1.6 goals per game so far, compared to 2.3 during the 2006 tournament, 2.51 in 2002, and the current record low of 2.21 goals per game in the 1990 World Cup tournament.  Again, it may be too early, but it certainly suggests the ball is no nightmare for goalkeepers.

For another data point, the MLS has been using the ball all season with little effect on goal scoring.  (Well, my favored DC United has seen it’s average goals per match drop from last season’s 1.43 to this season’s embarrassing 0.83, but I don’t think the ball is at fault.)  So far this year the MLS has seen an average of 2.5376 goals per match (93 games played), almost exactly equal to last season’s average of 2.5378 goals per match (225 games played).

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The Ajax soccer talent factory

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Michael Giberson

The New York Times Magazine has a feature article on the Ajax soccer development program – they recruit players as young as 7 years old and train them to 19 years if the player is good enough to be kept with the program. Like the development programs of other soccer teams, Ajax begun their program to identify, attract and train young players for the Ajax professional team, long one of the best in Europe. But with more money being made by top players in the English, Spanish, and Italian leagues, Ajax has shifted strategy a bit, aiming to send players to the best teams in the world. The payoff? Millions of dollars to Ajax from transfer fees.

Not every player becomes a star, perhaps just a few will. But as the article points out, the rewards for developing and selling the contract rights for just one superstar can keep the whole operation rolling for a while.

HT to Al Roth and the Market Design blog, who said, “shades of both Harry Potter and Ender’s Game.”

World Cup begins in 5 days.

South Africa hotel price gouging study

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Michael Giberson

International accounting firm Grant Thornton has surveyed 2,500 hotel and other properties in South Africa and concluded that about half of the properties will not be charging a premium rate during the upcoming World Cup.  In some cities, however, a majority of properties were raising rates, sometimes significantly. (Another summary: “Fifty three percent of Durban accommodation establishments were planning to charge more than 50 percent above their peak season rates for the World Cup, a survey into price gouging has found.  This is the second highest in the country after Gauteng with 65 percent, the survey commissioned by South African Tourism has revealed.”)

Tourism, hotel associations, and government officials in South Africa have put significant effort into trying to persuade property owners not to raise rates dramatically.  But demand will be extraordinarily high for a few weeks this summer and the supply available to meet that peak demand will be around for years.  It seems odd to encourage property owners not to adjust prices to reflect the extraordinary demands associated with World Cup.

At least in the South African case the anti-price gouging effort is rooted in persuasion rather than force.  Unlike, say, in several states of the United States, where the state government may impose potentially substantial fines, or in Venezuela or Sri Lanka, where government troops have conducted raids on businesses with prices violating government policy.

It also seems odd that this topic gets discussed under the category of “price gouging.”  Prototypically, price gouging involves sharp price increases on necessary goods during emergencies.  While hotels are frequently targets of price gouging allegations, typically it is when victims of a hurricane or other natural disaster find themselves charged higher-than-usual rates.

No emergency is driving consumers to seek housing in South Africa during the World Cup. Hundreds of millions of people worldwide will watch the World Cup on television, me parochially rooting for CONCACAF teams included. Maybe that explains why I’m not particularly concerned about the fans that are wealthy enough and committed enough to fly into South Africa for a few games. Whatever might be said about the benefits of restraining price increases, it this cases the potential “victims” are incurring the hazard.

Tickets into the olympics

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Michael Giberson

Ticket scalping, like price gouging, is a usually pro-social market activity that is stuck with a pejorative name.  At Swifter, Higher, sportswriter Kyle Whelliston writes about his experience picking up a cheap ticket into the first hockey game of the Vancouver Olympics.  It wasn’t as easy as he hoped, but at a cost of missing the first few minutes of action he was able to get a price he liked.

What surprised me in the article was how well organized the gray-market activity was. I wonder whether the Olympics would increase or decrease overall ticket revenue by facilitating an active secondary market (assuming a secondary market was legal in the host country).

(Via Freakonomics blog.)

Football helmets and head injuries

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Michael Giberson

Paul Walker at Anti-Dismal sees the economic content in the recent Wall Street Journal article on football, helmets, and head injuries.  Here’s a piece of the story:

Why do football players wear helmets in the first place? And more important, could the helmets be part of the problem?

“Some people have advocated for years to take the helmet off, take the face mask off. That’ll change the game dramatically,” says Fred Mueller, a University of North Carolina professor who studies head injuries. “Maybe that’s better than brain damage.”

The first hard-shell helmets, which became popular in the 1940s, weren’t designed to prevent concussions but to prevent players in that rough-and-tumble era from suffering catastrophic injuries like fractured skulls.

But while these helmets reduced the chances of death on the field, they also created a sense of invulnerability that encouraged players to collide more forcefully and more often. “Almost every single play, you’re going to get hit in the head,” says Miami Dolphins offensive tackle Jake Long.

So there is talk about giving up on helmets.

One of the strongest arguments for banning helmets comes from the Australian Football League. While it’s a similarly rough game, the AFL never added any of the body armor Americans wear. When comparing AFL research studies and official NFL injury reports, AFL players appear to get hurt more often on the whole with things like shoulder injuries and tweaked knees. But when it comes to head injuries, the helmeted NFL players are about 25% more likely to sustain one.

Andrew McIntosh, a researcher at Australia’s University of New South Wales who analyzed videotape, says there may be a greater prevalence of head injuries in the American game because the players hit each other with forces up to 100% greater. “If they didn’t have helmets on, they wouldn’t do that,” he says. “They know they’d injure themselves.”

The economics at issue is variously referred to as the Peltzman effect and the Tullock effect, namely, strategic adaptation to safety regulations or devices in ways in which offset some of the intended outcomes.  The safer the vehicle, the bigger the risks that drivers are willing to take.  Note that there may be negative externalities, as for pedestrians walking in the neighborhood of safer drivers taking bigger risks.

Or, to return to the football example provided above, the better the helmet, the harder the hits delivered.

Gordon Tullock’s proposal, illustrated in the title banner at the economics blog Offsetting Behavior, is placement of a large spike on each car’s steering wheel with the point aimed directly at the driver.  Sure, riskier for the driver, but much safer for everyone else.

More post-season tournament design issues: MLS tiebreakers

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Michael Giberson

For DC United fans, the MLS season is over.  While some fans contemplate coaching and roster changes, a few of us are still scratching our heads about the MLS tiebreaker rules and the complications presented by the final weekend of play (which had five teams angling for two remaining post-season positions. See here for an attempt to list them all, and an updated list.  See here for commentary.  Here a fan calls upon MLS to “stop the madness.”)

The combination of outcomes over the weekend put one of the five teams (New England, which improbably won its game) clearly over the others and one (Dallas, which lost its game) out of the running.  Three (Colorado, DC United, and Real Salt Lake) were tied for the final position and the tie breaker favored Real Salt Lake, which advanced to post-season play.

However, had New England lost, the situation gets interesting.  In this case, the tie breaking rules among Colorado, DC, and RSL would send Colorado and RSL into the playoffs.  However, if Dallas would have tied rather than lost its match, the tie breaking rules among Colorado, Dallas, DC, and RSL would have sent DC and RSL into the playoffs.

This interactive effect seems (at least to me) to violate an intuition about how these sorts of things should work.  Either DC was a better team than Colorado over the season or it was not, and whether Dallas won or lost against some another team in their final match should have little bearing on whether or not DC was better than Colorado during the season.

The intuition I’m talking about has been formalized in economic theory as the “independence of irrelevant alternatives” (IIA) principle. Formally:

If A is preferred to B out of the choice set {A,B}, then introducing a third alternative X, thus expanding the choice set to {A,B,X}, must not make B preferable to A.*

In this case: If Colorado is preferred to DC out of the set {Colorado, DC, RSL}, then introducing a fourth alternative Dallas, thus expanding the set to {Colorado, Dallas, DC, RSL}, should not make DC preferable to Colorado.  But the rules would have worked in just this way, had New England lost its final match.

Can this problem be fixed?  Why not the way that the professionals in Europe do it: first recourse in the event of a tie is to goal differential over the full season, then to total goals scored.

Sadly, such a rule would not have helped DC this season the way our defense gave up goals.  Is it too late to get Ryan Nelsen back at central defense?

*TECHNICAL NOTE: The formulation is stated in the simpler individual choice form, but the MLS tiebreaking rules may be seen more as a social choice mechanism.  Perhaps some form of Arrow’s impossibility theorem arises, meaning I’m unlikely to see a fully satisfying tiebreaking rule.  However, it does seem that goal differential avoids violating IIA.