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Two puzzlers from the racing world

A satchel full of jockeys have been banned from riding at Churchill Downs. The reason? They want someone else to pay for their insurance, and threatened to boycott the races. The issue has heated up because track-sponsored insurance caps benefits at $100,000, and supplemental insurance is not cheap. This is a sport where injuries are a fact of life (a serious spill injurying rider Tony D'Amico prompted the action), with the potential for enormous costs. It's a very risky job.

Lets look at the basic economics of this. Horse owners pay jocks to ride their horses. To a first approximation, they don't worry about where the money goes, what matters is simply the price. The boycotting jockeys are asking that money be awarded them from a different pot - the purses that racehorse owners compete for. If you reduce that size of that pot, what happens to the amount owners are willing to pay the jocks to ride for it? Not to mention that much of the jockeys' earnings are derived directly from a designated percentage of purses!

For some reason, the logic of the Coase theorem never seems to apply in the world of racing. My hunch is that the contracting failure is rooted within the jockey colony. There is a real problem here, and they are tossing it to the industry in order to solve it. But the racing industry is a notoriously disorganized set of warring institutions, so that doesn't look like a promising bet either.

If you find all of that puzzling, try this: Smarty Jones almost pulled a Michael Jordan - a comeback from retirement:

Smarty Jones was retired Aug.2 after it was discovered he had bone bruises in his feet, the effects of a grueling 3-year-old campaign that fell just short of a Triple Crown sweep.

Chapman said she and her husband, Roy, were stunned during the retirement conference call when prominent veterinarian Dr. Larry Bramlage said: "We bring horses back from this all the time. It's not a structural problem, and the prognosis for full recovery is excellent."

Chapman said it was the first time they had heard such a favorable prognosis and that their vet in New Jersey had said that Smarty's ailment was serious enough that he should be retired.

After Bramlage's comments, the Chapmans waited two more months and had Smarty Jones re-examined, hoping he would be healthy enough to resume training for a 4-year-old campaign. But an ultrasound exam in October revealed cartilage erosion in the left ankle, ruining any hopes of a comeback.

Cartilage erosion? That's the first we'd heard of that.... There's always a mystery at the races.