Wednesday, December 07, 2005
The Coase Bowl System
With nothing better to do, Congress will hold hearings today - webcast available! - on the BCS system of allocating teams to major bowls. In that spirit, I would like to take things further down the path of ridiculousness and discuss the system of matching teams in minor bowls.
The claim that "we got screwed" is often made when teams are unseeded or uninvited for contests and tournaments. It happens in the NCAA basketball tournament, the BCS, and the bowls. The potential is there for the World Cup as well, where a bizzare process led Mexico to be seeded over the U.S., primarily because of the U.S.'s dismal showing in France '98. (The U.S. finished ahead of Mexico in qualification for this World Cup, and beat them in the last one.) U.S. Coach Bruce Arena is taking the high road, but doesn't it seem a tad ridiculous that teams are seeded based on the performance of coaches and players - Smith, Lalas - whose careers ended long ago?
But I digress. My purpose is not to complain about Mexico, but to complain about the complainers in the bowl matching process. Now, I agree with them on one point: there is little that is "fair" about bowl invitations. For an example close to home, Clemson (at 7-4) was invited to the #4 ACC bowl in Orlando, despite having lost to both Boston College (8-3) and Georgia Tech (7-4), with both teams also having better conference records. But BC is headed to Boise, the #6 bowl, and Tech to Seattle for the Emerald Bowl, which is strictly leftovers, a bowl in desperate search for a team. Not fair.
Although BC is not complaining, Tech is. But not about Clemson! Tech's gripe is with 6-5 Virginia, who lobbied hard, and successfully, to land a berth in the Music City Bowl. That is, they "bought the game" in Nashville.
This is even feasible! But it is not chosen. Conferences could opt for this but don't, for the simple reason that bowls prefer to maintain the right to choose. Holding this right increases the payout they make to the conference. While it's not clear to me how transaction costs limit the equivalence between the two allocations of property rights, my hunch is that, to repeat, bowls will pay more if they hold the right to choose. And since money talks, Braine's plea to do something is unlikely to get very far. Indeed, I'll wager that he'd vote against his own proposal.
The claim that "we got screwed" is often made when teams are unseeded or uninvited for contests and tournaments. It happens in the NCAA basketball tournament, the BCS, and the bowls. The potential is there for the World Cup as well, where a bizzare process led Mexico to be seeded over the U.S., primarily because of the U.S.'s dismal showing in France '98. (The U.S. finished ahead of Mexico in qualification for this World Cup, and beat them in the last one.) U.S. Coach Bruce Arena is taking the high road, but doesn't it seem a tad ridiculous that teams are seeded based on the performance of coaches and players - Smith, Lalas - whose careers ended long ago?
But I digress. My purpose is not to complain about Mexico, but to complain about the complainers in the bowl matching process. Now, I agree with them on one point: there is little that is "fair" about bowl invitations. For an example close to home, Clemson (at 7-4) was invited to the #4 ACC bowl in Orlando, despite having lost to both Boston College (8-3) and Georgia Tech (7-4), with both teams also having better conference records. But BC is headed to Boise, the #6 bowl, and Tech to Seattle for the Emerald Bowl, which is strictly leftovers, a bowl in desperate search for a team. Not fair.
Although BC is not complaining, Tech is. But not about Clemson! Tech's gripe is with 6-5 Virginia, who lobbied hard, and successfully, to land a berth in the Music City Bowl. That is, they "bought the game" in Nashville.
"When you have a 7-4 record, which is better than Virginia's, and when you have a 5-3 conference record, which is better than Virginia's, you shouldn't have to buy a game," Georgia Tech athletic director Dave Braine told the Atlanta Journal-Constitution. "Until the ACC does something about bowls taking schools because of the number of tickets they'll sell and fans they'll bring, we'll have this situation."Braine's plea to "do something," like other proposals to alter the allocation of property rights, can be critiqued using the Coase theorem. Braine's idea essentially changes a "right to invite" system to a "right to play" system. Records and tie-breaking formulas would determine the order in which schools could choose bowls. Finish first, and enter the BCS. Finish second, and choose the Gator or perhaps the Peach. Finish sixth, as Clemson did, and it's welcome to Boise! Unless they swapped rights with the #4 team (which would have been BC in this instance).
This is even feasible! But it is not chosen. Conferences could opt for this but don't, for the simple reason that bowls prefer to maintain the right to choose. Holding this right increases the payout they make to the conference. While it's not clear to me how transaction costs limit the equivalence between the two allocations of property rights, my hunch is that, to repeat, bowls will pay more if they hold the right to choose. And since money talks, Braine's plea to do something is unlikely to get very far. Indeed, I'll wager that he'd vote against his own proposal.
