Robert Tollison was a great economist, and as nice a man one could ever meet. Bob passed away suddenly on Monday morning at the age of 73. I’d like to share a personal remembrance of him, and to highlight his work in sports economics, to which he made many significant contributions.
I met Bob for the first time at the 1989 meetings of the Southern Economic Association. I had read several of his papers during my grad school days, and by then he was the Duncan Black Professor of Economics and Director of the Center for Public Choice at George Mason. I remember well being introduced to Tollison and him saying in his soft but steady voice, “It’s nice to meet you. I read your recent paper in the JPE. It’s a very good paper.” Cigars were lit and liquor flowed that night but I was already on cloud nine.
On to sports. Bob was a sportsman as well as an economist, and it was quintessentially natural for him to combine the two passions. He played basketball for Wofford College, and later with friends and colleagues. He was a big fan, particularly of the Clemson Tigers, and followed the games closely. But he was a sharp critic of the NCAA, and was involved as an economic expert for three decades in litigation which challenged a number of the monopolistic practices of the college sports cartel. Much work remains to be done on this front, but the victories of college athletes in the courtroom are due in part to Bob’s work on their behalf.
Of course, it was Bob’s scholarship on the economics of sports that put him in position to attack the NCAA. He had a nack for being early on the scene of emerging fields in economics and he thus helped define them. His 1992 book with Arthur Fleisher and Brian Goff, The National Collegiate Athletic Association: A Study in Cartel Behavior catalogued a variety of NCAA policies which had more to do with suppressing economic competition than enhancing competition on the field itself.
Earlier, he and Brian edited and contributed to Sportometrics (1990), a book which more accurately captures Bob’s approach to sports economics, indeed economics in general. Bob defined sportometrics as “the application of economic theories to the behavior of athletes in the real world to see if we can explain what they do, and to see if what they do can help us explain the behavior of people in other professions.” Since then there have been scores of sportometrics papers, some published in the most prestigious economics journals. But Bob was there first. His 1984 paper with Bobby McCormick in the JPE, “Crime on the Court,” exemplifies this. When the ACC added a third referee to conference basketball games in 1978, the experiment offered an opportunity to explore Gary Becker’s model of the economics of crime and punishment, using fouls called on basketball players. The added referee increased the probability that a foul would be detected. Hence if actual fouls were unchanged, the number of fouls *called* in a game would increase. But player behavior is likely adapt to the increased probability of being called for a foul, and the number of actual fouls would decrease as a result. McCormick and Tollison found that the number of foul calls decreased by over 30% with the addition of the third referee, suggesting that this policy innovation resulted in a cleaner game. The NBA followed suit in 1988 by adding a third referee to its games.
This just scratches the surface of his work in a field of study he helped to create. I’ve created a list of his contributions to sports economics which you can see here.
I’m lucky and privileged to have had Bob as my colleague at Clemson for the past 13 years. His door was always open. His desk had a crossword puzzle on it more often than not, but if you walked in to his office you had his full attention. You were never more comfortable talking with a scholar than when you were with Bob. He did more in his life than most would accomplish in a dozen lifetimes, but he has gone too soon, and we will miss him like no other. Bob loved The Sports Economist blog, and I know he’d be happy to be remembered here.
P.S. There are a number of appreciations of Bob Tollison that have appeared. David Henderson’s recollection of his time at the Council of Economic Advisers — “Bob Tollison was the best boss I ever had” — is unique and particularly good. Also good and informative is the appreciation by The Public Choice Society. Mike Maloney is collecting these and posting them on his webpage.
The Dodgers first NLDS game was not a sellout. It was reported as 53,901 — a huge number of fans — but not a sellout in the cavernous Dodger Stadium, which has a listed capacity of 56,000. Today, things may be bleaker. As of an hour ago, get-in price for today’s game was as low as $6.95 on secondary markets, which are said to have a “huge glut” of Game 4 tickets:
Yesterday’s less-than-capacity crowd could have something to do with it being scheduled for 1pm on a Monday when people have to go to work and school. Today’s glut, however, is being fueled by both a day game — it’s a 2pm local start — and the fact that the time of the game was not set until after midnight Los Angeles time last night by virtue of Major League Baseball scheduling dependent on the outcome of the Cubs-Giants game, which went into the wee, wee hours. The 2pm start holds now, but if the Cubs had won, the Dodgers game would’ve been moved to 5pm local time, and no one in Los Angeles knew when the game would’ve been until after midnight last night.
It’s hard enough to fill a stadium that holds 56,000 people. It’s harder still to fill a 56,000-seat stadium on a weekday. It’s harder still, however, to fill it when the game time could change by three hours depending on what happens the early morning of that day’s game. And then you have to remember that Yom Kippur begins at sundown tonight, meaning that a 5pm game — which would’ve ended after sundown — was going to preclude a certain number of fans from attending in the first place, likely causing many to hold off purchasing tickets.
My quick take is that these are all valid points on why attendance was below capacity yesterday and why it likely will not be at capacity today. But MLB taken as a whole wants this year’s most-popular draw in the playoffs (the Cubs) in its most-valuable television time slot. Unfortunately, that has left Dodgers fans in some limbo.
A recent article in the Wall Street Journal tackled the issue of game lengths in major college football.
One morning last week, a plane left Los Angeles at 8:01 a.m. PDT. It was carried across the country by an extraordinary tailwind and made it all the way to Washington, D.C. by 3:02 p.m. ET. Total flight time: 4 hours and 1 minute.
Later that day, a football game between Florida State and Ole Miss kicked off at 8:06 p.m. It smacked into the sport’s ordinary headwinds—short touchdown drives, long television breaks and a longer halftime—and the fourth quarter wasn’t over until 12:10 a.m. on Tuesday. Total game time: 4 hours and 4 minutes.
The article’s author, Ben Cohen, this year’s average game length so far is almost 3.5 hours, 20 minutes longer than in 2006.
Apparently, it’s largely Baylor’s fault.
One strange truth of this sport is that faster offenses lead to slower games. More first downs result in more clock stoppages, and more touchdowns result in more television commercials. In other words, the more exciting a team is, the more excruciating its games are.
It’s almost impossible now for a high-scoring, highly entertaining matchup to wrap up in a reasonable amount of time. That’s why it makes sense that one fast team is most responsible for the sport’s epic slowdown: Baylor.
I’d offer three more causes.
- There are more/longer commercial breaks
- Halftime lengths are longer (20 minutes rather than 15 minutes that old dudes like me remember from back in the day).
- The official review of plays.
One way to shorten games while keeping 1, 2, and 3 would be to let the clock continue to run after a first down, except for the last, say, 2 minutes of each half.
What are some other causes? What are some other fixes?
Deadline extension for NAASE sessions at the Missouri Valley Economics Association (MVEA) – the new deadline is August 25th, 2016.
Michael Davis, Nick Watanabe, and I are organizing North American Association of Sports Economists (NAASE) sessions at this fall’s MVEA annual meeting. This year’s meeting is scheduled for Oct. 27 – Oct 29 in St. Louis, Mo. at the Hyatt Regency at The Arch. For more information about the conference and the MVEA, the MVEA website is MVEA.net.
You can submit abstracts to Michael Davis (email@example.com), Nick Watanabe (Nick’s new email address is firstname.lastname@example.org), or me (email@example.com).
We hope to see you there.
Michael Davis, Nick Watanabe, and I are organizing North American Association of Sports Economists (NAASE) sessions at this fall’s Missouri Valley Economics Association (MVEA) annual meeting. This year’s meeting is scheduled for Oct. 27 – Oct 29 in St. Louis, Mo at the Hyatt Regency at The Arch. We had 3 excellent sessions last year at the MVEA meeting in Kansas City. For more information about the conference and the MVEA, the MVEA website is MVEA.net.
The MVEA has a cash award for the Best Graduate Student Paper, so we encourage submissions by graduate students. This conference is an excellent place for students to work on their presentation skills and to show off their work.
You can submit abstracts to either Michael (firstname.lastname@example.org), Nick (email@example.com), or me (firstname.lastname@example.org). The deadline is August 16th, 2016.
The Braves area bad baseball team, and ticket demand is low. The manager has already been fired. With thousands of empty seats available at zero marginal cost, a good marketing plan seems like a timely effort.
Here is what the Braves have come up with: a monthly pass for $39. The pass is renewable, you can buy up to four, and your seat locations are assigned and sent to you by text an hour or two before each game.
The Cubs are in town this weekend. The novelty of the marketing and the quality of the opponent make this a very tempting proposition, even for a guy living 120 miles away.
So argues Daniel Frank in his piece “Inequality in the NBA“. Here are a couple of his observations:
As American politics gets consumed by discussions on income inequality, a similar problem is developing in the NBA. The NBA has created a hierarchy; super teams with multiple superstars competing for a championship, and everyone else, just watching on the treadmill….
LeBron James has been to the NBA finals six years in a row. Does this represent some sort of skill by Miami and Cleveland, putting them above the rest of the league? Have they done something deserving of this massive level of success? Or are they just lucky to have Lebron James sign with their team. In most cases, the acquisition of elite players is largely dependent on luck….
LeBron James has been to the NBA finals six years in a row. Many people attribute this to him being one of the best players in the NBA, but this misses the bigger picture. Give LeBron James a $53 million dollar salary and he won’t be in a position to be surrounded by stars like Kyrie Irving and Kevin Love (or Dwyane Wade and Chris Bosh) anymore. The max contract allows great players to team up with other stars, making these lucky teams elite.
These are just three snips from an interesting and provocative piece. Daniel’s argument takes the salary cap as a given, and the income cap as generating the unequal distribution of talent. This isn’t exactly Sports Econ 101, but it is certainly food for thought.
The Summer Olympics are just around the corner and the Spring 2016 issue of the Journal of Economic of Economic Perspectives has a paper on the economics of the Olympics. The paper is authored by two economists who have written extensively on the economics of mega events, Rob Baade and Victor Matheson. Here is a link to the paper. From the paper, here is Baade and Matheson on the cost of the bidding process.
“Bidding for the Olympics is no small undertaking. A key to the bidding process involves a visit by the Evaluation Commission of the International Olympic Committee which assesses the condition of the applicant city. A significant portion of the bidding expense relates to the preparations the applicant city undertakes to impress the Evaluation Commission, and these plans, including detailed architectural renderings, financial estimates, and pre-event marketing, are likely to be extensive since it cannot be known what the preparations of the other applicant cities will be. Chicago, for example, spent at least $70 million and perhaps over $100 million on its unsuccessful application to host the 2016 Games (Pletz 2010; Zimbalist 2015). But the costs of the formal bidding process pale in comparison to the expenses a region will incur should it actually be selected by the International Olympic Committee.”
Here is the information on the two references in the paragraph.
Pletz, John. 2010. “Chicago 2016’s Final Tally: $70.6M Spent on Olympics Effort.” Crain’s Chicago Business, May 17.
Zimbalist, Andrew. 2015. Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup. Brookings Institution Press.
Does Baseball’s Salary Arbitration Process Reduce Player Performance and Weaken Player-Club Relationships?
Guest Post by John Budd
Previous research on Major League Baseball’s final-offer salary arbitration process has found that players who lost in arbitration have subsequent lower on-field performance than those who won in arbitration. But what about simply going to arbitration rather than reaching a negotiated settlement? Does having a hearing and a new salary imposed by an arbitration panel affect player performance or the player-club relationship?
The conventional wisdom in dispute resolution indicates that arbitration should have negative consequences because the participants lose control of their own destiny, can’t tailor agreements to their liking, and feel less ownership in the process and the outcome. In 1974, Minnesota Twins pitcher Dick Woodson won the very first arbitration hearing but was traded to the richer New York Yankees less than three months later. The ability to tailor contractual outcomes to the fit the parties’ preferences can be constrained by the arbitration process. The arbitration process is also adversarial and the player hears all the reasons why the club feels he does not deserve the salary he is requesting. So this conventional wisdom predicts that players who reach a new salary agreement voluntarily will have better subsequent on-field performance and stay with their teams longer than players who have a salary imposed by the arbitration process.
But what happens in practice? This is the focus of our research article “Are Voluntary Agreements Better? Evidence from Baseball Arbitration” (John W. Budd, Aaron J. Sojourner, and Jaewoo Jung, forthcoming in Industrial and Labor Relations Review). To analyze these questions, we look at 1,400 salary re-negotiations between 1988 and 2011 that all involved exchanging salary demands prior to a potential arbitration hearing. Of these, 83% reached a negotiated settlement prior to an arbitration hearing and the remainder were settled via arbitration. We only include those who exchanged offers to try to remove as much heterogeneity as possible. In multivariate analyses, once we control for prior player performance, we do not find any statistically significant differences in on-field performance in the year immediately following arbitration. This might be due to players’ career concerns. Most arbitration-eligible players are early in their careers and their on-field performance is visible to other clubs. So a player has an incentive to set aside any residual feelings from the dispute-resolution process and to perform at a high level in order to position himself for subsequent contracts.
But there are not the same incentives to display positive behaviors in dimensions of performance that are harder for other clubs to see, such as clubhouse attitude. Indeed, in contrast to a lack of differences in on-field performance, we find that players who go to arbitration are significantly less likely to still be with the arbitration team at the end of the season—win or lose. In fact, even after controlling for prior player performance and other factors, arbitration nearly doubles the likelihood of a player not being with the same team at the end of the season. It seems unlikely that this result can be explained solely by clubs’ financial concerns. Start with the clubs that lose in arbitration. They might trade or release players because they are forced to pay more than they wanted, but even this isn’t clear because research has shown that arbitrated salaries are less than players’ market value. Even if we allow this to explain the effect for clubs that lose, what about clubs that win? In this case, it is hard to see how a purely financial reason would explain the result that the relationship is less durable because the club is paying less than they wanted. One might think that an arbitration-winning club might still look to trade a player if the club thinks it will be harder to retain the player in a future contract negotiation. But this implies a perception that some element of their relationship has been weakened by the arbitration process, either because of the adversarial nature of the process or the inability to tailor agreements to their liking. An arbitration-winning club might also trade or release a player if it expected or observed reduced player performance. We do not find performance differences observable on the field, but there could be differences in performance along dimensions that are hard for other teams (and us) to observe, such as clubhouse attitude.
One interpretation consistent with the pattern of results is that the arbitration process harms the player-club relationship and negatively affects player behaviors that are hard to observe (e.g., clubhouse attitude, loyalty to the team), but career concerns and/or loyalty to teammates and fans causes a player to continue to publicly perform at his usual level. This negative effect on the player-club relationship could also explain why there have typically been very few hearings in recent years.
“When a key responsibility of a manager is to allocate more or less attractive tasks, subordinates have an incentive to work hard and demonstrate their talents. As a new manager is less well informed, management dismissals reinvigorate this tournament competition—but only in sufficiently homogeneous teams. We investigate this hypothesis using a large dataset on dismissals of soccer coaches, whose main task is indeed the selection of players. We find that dismissals enhance performance (only) in homogeneous teams. Moreover, we show that there is typically a negative selection bias when evaluating succession effects, which reconciles previous contradictory findings. (JEL D22, J44, J63)”
That is from a newly-published article in the April 2016 issue of Economic Inquiry. The title of the article is “The Impact Of Managerial Change On Performance: The Role Of Team Heterogeneity” and it’s authored by Gerd Muehlheusser, Sandra Schneemann and Dirk Sliwka.
Cross posted at Market Power.