As organized, multiplayer video game competitions — also known as esports, or electronic sports — continue to gain recognition in China, entertainment giant Tencent Holdings Ltd. has accelerated its esports expansion with the unveiling of a new five-year plan.

The plan, which involves setting up esports leagues, tournaments and associations, nurturing players and constructing esports-themed industrial parks, was published by Tencent E-Sports, a subsidiary established in early December.

Tencent is the world’s largest mobile gaming company by revenue, according to research firm Newzoo. With the new plan, it aims to create a 100-billion-yuan esports industry in China within five years, the company announced on Friday at a press conference.

The plan was based on Tencent’s expectations that China is set to become the world’s largest esports market. Tencent predicted there will be 220 million esports players in China and 335 million globally by the end of this year.

Here is the story.  And:

The number of Chinese “red tourists” who visit Russia to retrace a shared communist history has been soaring in recent years, contributing to the wave of Chinese visitors to Russia that has grown with the help of closer bilateral relations between the countries, according to industry insiders on Tuesday.

“There definitely is growing interest among Chinese tourists for Russia, especially the older generations, who are nostalgic about the history of Russia,” Zeng Qingan, general manager of Beijing Global Travel Ltd, told the Global Times.

Zeng said that since his company started tour groups to Russia nine years ago, the number of participants has increased fast, especially after the company redesigned its tour routes in 2014 to cover historical Soviet Union era sites, including the Red Square and Victory Square in Moscow, the Lenin Memorial Museum in Ulyanovsk and Moscow State University. The travel firm called it the “Red Tourism” package.

Link here.  The revolution not only will be televised, but they will make an e-sports version of it, marketed on WeChat.

Via Marc Canal Noguer:

Taking My Talents to South Beach (and Back)

Shoag, Daniel, and Stan Veuger. “Taking My Talents to South Beach (and Back).” HKS Faculty Research Working Paper Series RWP17-019, May 2017.


We study the local economic spillovers generated by LeBron James’ presence on a team in the National Basketball Association. Mr. James, the first overall pick of the 2003 NBA draft, spent the first seven seasons of his career at the Cleveland Cavaliers, and then moved to the Miami Heat in 2010, only to return to Cleveland in 2014. Long considered one of the NBA’s superstars, he has received the league’s MVP award four times, won three NBA championships, and been a part of two victorious US teams at the Olympics. We trace the impact a star of Mr. James’ caliber can have on economic activity by analyzing the impact his departures and arrivals had on business activity close to the Cleveland Cavaliers and Miami Heat stadiums. We find that Mr. James has a statistically and economically significant positive effect on both the number of restaurants and other eating and drinking establishments near the stadium where he is based, and on aggregate employment at those establishments. Specifically, his presence increases the number of such establishments within one mile of the stadium by about 13%, and employment by about 23.5%. These effects are very local, in that they decay rapidly as one moves farther from the stadium.



Link to the page

Here’s an excellent story about Chris Carr who played in the NFL for 10 years and is now about to graduate from law school. That’s unusual but not so unusual, the late U.S. Supreme Court Justice Byron R. White also played in the NFL. What makes this story special is that Carr will specialize in immigration law. Why?

Carr grew interested in immigration law a few years ago, after reading Thomas Sowell’s “Ethnic America.” (“A really cool book,” he said.) That made him reflect on the country and “just how unique the American experiment was.” He read blog posts by Bryan Caplan, an economist at George Mason University, and the writing of Michael Huemer, a philosophy professor at the University of Colorado.

Hat tip: Fabio Rojas.

That is the topic of my latest Bloomberg column, here is one bit:

The decline of TV revenue is not the same as a decline of interest in the sport. NBA basketball is alive and well; it’s just that more people are cutting the cord on cable. They still might follow the NBA through its website, or watch highlights on YouTube, or share gifs on Twitter.

That shift is likely to favor the stars and the most athletic players, because they are more likely to be featured in very short clips. As for the incentives, player salary will matter less, and the desire to become famous on the internet — and thus win lucrative endorsement contracts — will discourage team play. Expect more attempts to produce spectacular sequences, even if that doesn’t always translate into wins. “Boring” but fundamentally sound teams — which are better to watch for a 2.5 hour game — will be disfavored by this trend. Sorry, San Antonio!

Here is another:

Another possibility is that the NBA will consolidate with fantasy basketball and video gaming to augment their revenue. The NBA already has plans to introduce an e-sports product. More speculatively, if more states legalize sports gambling, the league could enter into a revenue-sharing agreement with casinos or bookmakers. Imagine redesigning the playoffs to maximize the number of decisive games and thus boost betting interest — that could mean more but shorter playoff series. At least the fantasy component of such a basketball conglomerate might redistribute some of the attention back to players who are not superstars. Gamblers also tend to be well-informed about the teams they bet on, so this direction could encourage a smarter NBA, better designed for the nerds and fanboys.

Do read the whole thing.

Loving winning and hating losing are two fairly distinct motivations.  For instance, a fairly joyless person may nonetheless be motivated by the humiliation of a loss, or a non-envious, non-spiteful type could receive great pleasure from being number one, while not minding if someone later climbs higher yet.

If you both love winning and hate losing that is especially useful in one-on-one, zero-sum competitions, such as chess and tennis, and also in most team sports and perhaps securities trading as well.  Such people are more motivated, and motivated from more sides of their being, and if one of the emotions flags a bit the other is there to step in and maintain the pace and focus.

In venture capital, I suspect that hatred of losing may be a disadvantage.  No matter how successful you may be, most of your individual investments will lose money and hatred of losing may make you too risk-averse.  It might be better to have the ability to simply forget your losses and put them behind you.

For academics, it is more important to love gains than to hate losses.  Provided they don’t embarrass you, your forgotten articles just aren’t that big a deal and everybody has them, including Nobel Laureates.  A single key piece can make your career, however.

Is hatred of loss also unnecessary for book authors and music stars?  Ideally, you would think they should take lots of chances, but the exact tracking of sales makes them more risk-averse and thus boosts the relative status of the loss haters.  If they release a clinker book or album, the intermediaries are less keen to promote them next time around.  To the extent intermediaries become more important, that boosts the loss-hating performers, because intermediaries themselves are somewhat loss-hating.

What is the correct mix of gain-loving and loss-hating for a Navy Seal?  For a journalist?  A lawyer, programmer, or engineer?

In a job interview, what question should you ask to discern if someone is a gain lover or a loss hater or both?  Or neither!

German police arrested a man on Friday suspected of detonating three bombs that targeted the Borussia Dortmund soccer team bus in the hope of sending the club’s shares plummeting and making a profit on an investment, prosecutors said.

In a statement, the federal chief prosecutor said the 28-year old man, a dual German and Russian national identified as Sergei V., had bought options on Borussia Dortmund’s stock before the attack.

The team bus was heading to the club’s stadium for a Champions League match against AS Monaco on April 11 when the explosions went off, wounding Spanish defender Marc Bartra and delaying the match by a day.

Prosecutors last week expressed doubts about the authenticity of three letters left at the site of the attack that suggested that Islamist militants had carried it out.

The prosecutor’s office said the suspect had bought 15,000 put options, or contracts giving him the right to sell Borussia Dortmund’s shares at a pre-determined price, on the day of the attack, using a consumer loan he had signed a week earlier.

Here is the full story at Reuters.

From Erik Hembre:

State- and local-income tax rates differ across locations, giving low-tax teams a competitive advantage when bidding for players. I investigate the effect of income tax rates on professional team performance between 1977 and 2014 using data from professional baseball, basketball, football, and hockey in the United States. Regressing income tax rates on winning percentage, I find little evidence of income tax effects prior to 1994, but since then a ten percent increase in income taxes is associated with a three percent decline in winning percentage. A robustness check using within state variation in income taxes affirms this result. The income tax rate effect varies by league, with the largest effect in professional basketball, where teams in states without income tax win 4.5 more games each year relative to high-tax states. The income tax effect is smallest in major league baseball, which could be explained by greater team payroll disparity. Placebo tests using college team performance find no evidence of an income tax effect.

The pointer is from the excellent Kevin Lewis.

Christina, an apparent MR reader, asked me whether it is really true that AI helps military defense more than military offense, as was previously argued by Eric Schmidt.  I can think of a few parallel cases:

1. In chess, AI clearly has helped the defense.  Top computer programs never play 32-move brilliant sacrifice victories against each other, a’ la Mikhail Tal.  Most games are drawn, and a victory tends to be long and protracted.  (Do note it is sometimes better to get the war over with and lose right away.)

2. In the NBA, analytics have helped offense more, for instance by showing that more attempted shots should be three-pointers.  Analytics of course is not AI, but you can consider it a more primitive form of using information technology to improve decisions.

3. It is interesting to ponder the differences between chess and the NBA as potential analogies.  In chess, the attack often “plays itself,” as the player with the initiative may be following fairly standard strategies of bringing the Queen and some lesser pieces in the neighborhood of the opposing King, or maybe just capturing material.  Finding the correct defense is often a more complex matter, and the higher quality of the chess-playing programs thus boosts defense more than offense.  Besides, under perfect information chess is almost certainly a draw, and the use of AI asymptotically approaches that outcome.

In professional basketball, the offense typically has more options and permutations, and given any offensive decisions, the defense often respond in fairly typical fashion, such as lunging at the player attempting a shot, or doubling Stephen Curry as he crosses the half-court line.  In those cases where the defense has more options, however, analytics conceivably could help basketball defense more than offense.  A (hypothetical) example of this would be using game tape and AI to see which kinds of tugs on the jersey best disrupt the shot or rhythm of the team’s leading scorer.  That said, most of the action seems to be in honing the options for the offense.

4. Is warfare more like chess or more like the NBA?

I believe the USA has more options in most of its conflicts, and thus AI will help the United States, at least at first.

In the Second World War the Nazis had more options than their opponents.  In the Civil War and American Revolution, however, the available offense was more static and predictable, and AI for those fighting forces might have helped the defense more.  In the Iran-Iraq war I suspect the defense had more options too.  Terror groups have more meaningful options than the forces defending against terror, and thus AI might help terror groups more than the defense, at least provided they had equal access to the data and to the technology (which is doubtful at this point, still as part of the exercise this is useful).

5. One important qualifier is that the chess and NBA examples already assume a game is on to be played.  A war, in contrast, is started as a matter of volition on at least one side.  If AI creates a new arms race of sorts, where one side at times opens up a decisive lead, that may provoke more decisions to engage and thus attack.  The mere fact that AI increases the variance in the power gap between the two sides may increase the number of attacks and thus wars.

So there is more to this question than meets the eye at first, and I have only begun to engage with it.

Addendum: AI is also spreading in the legal world, will this help defendants or plaintiffs more?

Tennis sentences to ponder

by on March 23, 2017 at 2:49 am in Education, History, Sports | Permalink

[Andre] Agassi pauses when asked if he and his wife [Steffi Graf] sometimes hit a few balls in Vegas – for old time’s sake? “No. It sounds a nice idea. But as soon as you hit the first couple of balls you remember you can do this. But you’re also reminded of what you can’t do. I just thank God I played the game long enough to enjoy lots of good moments. It gave a lot and it took a lot. I think me and tennis are about even now.”

Here is the full interview, interesting throughout.

He was superb, here is the transcript, audio, and video.  We considered satire as a weapon, Harvard, long-distance running, Washington vs. NYC, Daniel Ellsberg and Edward Snowden, Caribbean culture and intellectual history, and of course Malcolm’s mom, among other topics.  His answers are so fluid and narrative they are hard to excerpt, but here is one bit from him:

COWEN: Overrated or underrated, the idea of early childhood intervention to set societal ills right?

GLADWELL: Overrated because to my mind it’s just another form . . . it became politically impermissible to say that certain people in society would never make it because they were genetically inferior. So I feel like that group, it’s like, “All right, we can’t say that anymore. We’ll just move the goalpost up two years.” And we’ll say, “Well, if you don’t get . . .” Or three years — “If you don’t get the right kind of stimulation by the time you’re three, basically it’s curtains.”

Why is that argument, which we decided we didn’t like it when they set the goalpost at zero, and somehow it’s super-important and legitimate and chin-stroking-worthy when they moved the goalpost to three. Truth is, people, it’s not over at three any more than it was over at zero. There are certain things that it would be nice to get done by the age of three. But if they’re not, the idea that it’s curtains is preposterous. It’s the same kind of fatalism that I thought we had defeated in the . . .

If you want to say that the goalpost should be at 30, then I’m open to it.

I asked what changes he would make to higher education:

GLADWELL: OK. I would establish a set of baseline criteria for admissions, and then I would have a lottery after that. So if you’re in the top 2 percent of your high school class — 5 percent, whatever cutoff we want — following test scores at a certain point, whatever cutoff we want, some minimum number of other things you do — you just go into the pot and we’re pulling out names. I’d probably triple or quadruple the size in the next 10 years, open campuses — probably two other campuses in the United States, one overseas.

I had this idea, I’m not sure how you’d do it, where I think that it would be really, really useful to ban graduates of elite colleges from ever disclosing that they went to an elite college.

I thought the Steve Pearlstein material was perhaps Malcolm’s highlight, but you need to read it straight through.

Here is a very short bit from me:

Most of my questions will be quite short, but my first question will be really, really long. Since everyone knows you and your work so well, I asked myself, “Who is Malcolm Gladwell?” And I tried to come up with an answer. I’ll give you my answer, and then you can correct me or add to that, and this will take a little while.

Definitely recommended.

USA NBA fact of the day

by on February 18, 2017 at 2:15 am in Data Source, Sports | Permalink

Overall, I estimate that the average white player in the N.B.A. has a fan base that is 56.7 percent white and 22.7 percent black. The average black player has a fan base that is 46.7 percent white and 32 percent black, a significant difference…

If a white and a black player are similar on paper, it is the black player who will have more fans.

Among black Americans, black players are roughly twice as popular as comparable white players. But black players get a slight boost from fans of every racial group. Compared with white players who are similar to them in all ways I could think to measure, black players have more fans among white Americans, Hispanic Americans and Asian-Americans.

Honestly, I was blown away by the overall size of this advantage. Roughly speaking, I estimate that a white player would have to score 10 more points per game to have as big a fan base on Facebook as he would have if he were black.

That is from Seth Stephens-Davidowitz at the NYT, there is much more discussion at the link, though no mention of The Incandescent Rex.  In other words, if the styles of the black players are in some way more dynamic and thus more popular (Rex being an exception, Pete Maravich another), and if we could adjust for that variable, how much of the race effect would go away?

Here is a description of the proposed rule change.  Felix Salmon asked:

I know nothing about baseball, but wouldn’t this give even more of an advantage to the team batting first?

I would expect the opposite (NB: I am not suggesting a weakness in Felix’s analytical abilities, only that British people don’t usually “get” baseball).  The team batting second in the inning always has more information than the team batting first, because the home team (which bats second) knows what the visitors scored in their half of the inning.

The closer you are to “runs,” the more valuable is this differential in information.  To see this, take those cases where the first-batting team fails to score in the top of the tenth inning.  The home team can then play for “only one run.”  If no one is on base, the strategies for “only one run” and “a bunch of runs” aren’t that different.  You’d like to start with some extra base hits, home runs, etc., in either case.  But with a man already on second (or on third, to see the point more clearly), you can consider some alternate strategies, such as just poking the ball to the opposite field.  You don’t need to swing for a home run so much, or try to stretch a single into a double, and so on.  You can play more conservatively in the offense, because you know that a single run suffices to win the game.

For the team that bats first, playing for “only one run” isn’t the sure-fire clincher, and so this helps the team that bats second in the inning, the home team.

Or so it seems to me.

Addendum: Via J.C. Bradbury, Cowen’s Second Law!

In 2015, to make extra point plays after touchdowns more uncertain, the NFL moved the extra point distance from the 2-yard line to the 15-yard line. Since the rule change, the expected points from an extra point attempt has fallen from 0.99 (averaging between the 2002 and 2014 NFL seasons) to 0.94 (averaging the 2015 and 2016 NFL seasons) while the expected points from the two point conversion remains 0.95 (averaging between 2002 and 2016 NFL seasons). While the total number of two point conversion attempts per season has almost doubled, most coaches still rarely attempt 2 point conversions when it would be point maximizing (and win maximizing under risk neutral or risk seeking preferences). Using dynamic programming, this paper argues that this result is evidence of a conservative bias and that teams could improve expected wins by attempting more two point conversions.

Hartley is at the Wharton School, here is the link (pdf).

On February 27, I’ll be having a Conversation with Tyler with Malcolm Gladwell.  (Sorry the event is already sold out!  In due time I’ll get you information on the live stream.)  What should I ask him?

I thank you in advance for your intelligent and scintillating suggestions.

Yup, I’m here.  I made this list before setting off:

1. Popular music: Few from any country come close to Fela Kuti, the main question is how many you should buy, not which ones.  Most of them!  On the CD medium, that old series of “two albums on one CD” was the best way to consume Fela.  On streaming, you can probably just let it rip.  And rip.  And rip.  Other favorites are King Sunny Ade and I.K. Dairo, I don’t love Fema Kuti.  You also might try Nigerian psychedelic funk rock from the late 60s and early 70s, for instance found here.  Most of all, there are thousands of wonderful local performers in Nigeria, you can watch a few of them on the Netflix documentary on the Nigerian music scene, titled Konkombe, recommended and only an hour long.

There is now a good deal of hit Nigerian and Nigerian-American music, such as Wizkid.  It is enjoyable but does not compare to Fela in terms of staying power.

2. Basketball player: The Dream is one of my three or four favorite players of all time.  My favorite Hakeem was watching him pick apart David Robinson play after play after play…see the final clip on the immediately preceding link.

3. Novel: Chinua Achebe, Things Fall Apart.  Honorable mentions go to Wole Soyinka, Ben Okri, and my colleague Helon Habila.  There are also the Nigerian-American writers, such as Chimamanda Ngozi Adichie.  Teju Cole is worth reading, including his non-fiction.

4. Movie: Well, I’ve seen parts of some of them, and you should at least sample some Nollywood if you haven’t already.  It’s kinetic.  The documentary “Nollywood Babylon” (Netflix) gives you some background.  As for “Movie, set in,” I draw a blank.  “Album, set in and recorded in” would be Band on the Run, Paul McCartney and Wings.

5. Actor: Chiwetal Ejiofor, he starred in “Twelve Years a Slave,” and is from a Nigerian family in Britain.

6. Presidential name: Goodluck Jonathan.

7. Artist: Prince Twins Seven Seven, or more formally Prince Taiwo Olaniyi Wyewale-Toyeje Oyekale Osuntoki.  He received his nickname because he was the only surviving child from seven distinct sets of twins.


8. Food dish: At least for now I have to say jollof rice, a precursor dish to jambalaya, further reports to come however!

The bottom line: Lots of talent here, plenty more on the way.