Wednesday, March 10, 2010

That Giant Sucking Sound from Edmonton 

That sound you heard at the end of each period in the US-Canada gold medal game was the giant sucking sound of a multitude of potties being flushed at the same time in Edmonton. Here is an amusing graphic courtesy of Justin Wolfers of the Freakonomics blog and produced by the good folks at Epcor in Edmonton.

HT John Chilton

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Wednesday, March 03, 2010

Canadian Hockey, Sex, and My Golf Game 

Related to Skip's post, how much happiness was generated in Canada by Sunday's hockey victory?
"Thousands on street" in Vancouver (maybe 150,000), Toronto, Ottawa, Montreal and all over the country.
Crowd estimates are always sketchy, but the crowd in Vancouver was large, very large. The team and entire audience's unabashed rendition of "O Canada" during the medal ceremony stirred even a cynical, non-Canadian economist like myself.

What other kinds of non-sports related celebration can match or surpass this kind of national celebration? The list isn't very long. V-E day, V-J day, ...? Where would one find such a large "utility" impact relative to the size of the revenues paid out for out-of-pocket expenditures by consumers?

Skip raises an interesting issue. Are these effects permanent or transitory? As with most utility-raising "recreational" activities ranging from sex to an enjoyable golf day, the warm glow fades. The Vancouver Games afterglow for Canadians may hang on longer due to gold medal performances, and, especially the hockey finish. The hockey finish itself, may have a very long-lived enjoyment value but at a much lower level just as the "Miracle on Ice."

Students sometimes ask me, isn't the enjoyment for the winning team's fans offset by the disappointment for the losing team's fans? Or, what if Canada had lost, is the downer to be subtracted from national "happiness." I like to use my golf game as an analogy. Yes, my relative "glow" increases when I shoot lower, but both bring enjoyment. Even losing a "match play" or scoring low in a tournament brings enjoyment, just less in relative terms.

On occasion, I can play badly enough to regret even going out. Maybe a Canadian loss on Sunday slips into this realm. My guess is that such an outcome would have been more analogous to Canada missing the medal round. Really poor performances raise some tricky questions regarding the intertwining of ex post versus ex ante measurement of happiness when part of the reason for playing is the "chance of winning" -- the participation -- and part is the expectation of winning.

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Wednesday, May 06, 2009

Phoenix Coyotes Bankruptcy: Real or Imagined? 

Yesterday the NHL's Phoenix Coyotes filed for bankruptcy. The Coyotes had reportedly lost $90 million over the past 3 seasons, and with credit scarce in today's roiling markets, there is every reason to believe that the team is in deep financial trouble. In addition, Phoenix has been particularly hard hit by the current recession with housing prices in the area falling to less than half of their peak in June 2006 and an unemployment rate more than double that of just 18 short months ago.

However, all may not be as it appears in Phoenix. The current owner has received a bid of $212.5 milllion from Jim Balsillie, co-CEO of BlackBerry maker Research In Motion, contingent on the team moving to southern Ontario, a move that the league normally might block. By filing bankruptcy, current Coyotes owner Jerry Moyes may simply be trying to enlist the court's help in forcing the league to accept the move to satisfy creditors. Ironically, the NHL itself is one of the team's largest creditors.

This would not be the first time an owner attempted to enlist the courts to prevail over a league's franchise location wishes. Al Davis successfully sued the NFL for the right to move the Oakland Raiders to Los Angeles in the 1980s. Many observers also believe the the ill-fated USFL's attempt to form a rival football league an subsequent antitrust lawsuit against the NFL during the same time period was a backdoor attempt to force an eventual merger between the NFL and the upstart league in order to get a handful of expansion franchises on the cheap.

Several comments: first, it's not clear at all that a bankruptcy court can force an unrelated party like the NHL to do anything just to help the creditors of the Coyotes. Second, it's also unclear why the NHL would want to force a team to remain in an unprofitable market when it seems clear that fan demand in Ontario could easily support another franchise in the area. Finally, while the Canadian jurisdiction may confound a simple answer, it's also not clear why Balsille and Moyes don't think that they would ultimately be successful in court in their bid to move the franchise even without the league's approval.

(Thanks to my student Shane McAdam for the heads up.)

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