Category: Sports

Efficient Markets in Everything

Sabermetrics worked but “once the casino catches on to your card-counting tricks, you can’t prosper at the table for long.”

NYTimes: The A’s, meanwhile, have tumbled back to mediocrity: the team is on its way to a losing season this year, after compiling a record of 231 wins and 254 losses over the previous three seasons. Most of the innovations introduced or popularized by Beane have been freely adopted by other organizations, thus eliminating whatever stealth advantages he once enjoyed.

… He told me baseball is moving “back to an efficient market — albeit one with some random events that don’t offer perfect efficiency — where whatever you spend, that’s where you’re going to finish.” In short, the Yankees spend a lot and make the playoffs pretty much every year. The Pirates don’t, and they don’t. There are aberrations to this pattern, but the pattern itself is unmistakable.

But the more efficient baseball becomes as a market, I asked him, the worse it is for you, right?

“Oh, yeah!” he said, and laughed.

Should the NBA move to a much shorter season?

In light of the lockout, K., a loyal MR reader, poses me this question.  Football, after all, gets by with a relatively small number of games, namely sixteen.  Every game is an event and a ritual.  So how about a 44-game season for basketball?

Fortunately for me, I don’t think this will work economically.  Why not?

1. Basketball is much more star-driven than football, which I take to be team-driven (“the Dallas Cowboys,” etc.).  In basketball, the goal is maximum exposure of the few top stars to as many markets as possible:  “Daddy, I want to go see Kobe Bryant.”  There are only five starters and you can see Kobe’s face and scowl the whole time.

2. Basketball depends partly on particular individual superlative performances, such as massive scoring nights by the top stars and signature dunks.  This requires a lot of games to be run.

3. Correctly or not, a single football game is taken as a decisive test of team quality.  While I would not argue that the best team always wins the Super Bowl, the game does seem to settle something in people’s minds.  A single basketball game too often is very close, depends on foul calls and refereeing, and depends on what appears to be luck, such as whether or not a final shot rims in and out of the basket.  In basketball, it is harder to get the single game to be so meaningful.  In football, a lot of games aren’t very close at all.

4. With the “game as ritual” strategy denied, basketball resorts more to a saturation strategy, if only to remind viewers and fans that it exists.

5. The inputs which get worked hard, namely the players and the arenas, don’t always have high opportunity costs.  Basketball involves less physical wear and tear than does football, which could not consider an 82-game regular season.

The funny thing is, I don’t even watch the NBA regular season, I simply like knowing that it exists and that I can read about it on ESPN and the like.  That longer process, to me, makes the playoffs seem more real.

Is basketball scoring a random walk?

Not when there’s a strike on!  Otherwise, maybe so, as Gabel and Redner report (pdf):

We present evidence, based on play-by-play data from all 6087 games from the 2006/07–2009/10 seasons of the National Basketball Association (NBA), that basketball scoring is well described by a weakly-biased continuous-time random walk. The time between successive scoring events follows an exponential distribution, with little memory between different scoring intervals. Using this random-walk picture that is augmented by features idiosyncratic to basketball, we account for a wide variety of statistical properties of scoring, such as the distribution of the score difference between opponents and the fraction of game time that one team is in the lead. By further including the heterogeneity of team strengths, we build a computational model that accounts for essentially all statistical features of game scoring data and season win/loss records of each team.

For the pointer I thank Michelle Dawson.

Bond markets in everything

Wimbledon bonds:

But there is a backdoor onto Centre Court. About 2,500 seats are reserved for investors in the club’s so-called debentures, or bonds.

The club has issued these since the 1920s to finance development. But instead of paying cash coupons, like regular bonds, Wimbledon debentures pay interest in something much more valuable: tickets.

Holders get one ticket for each day of the Wimbledon tournaments during the five-year life of the bond. And here is the kicker: If you don’t feel like going on any given day, you can sell it—legally.

Such mini-bonds are a new trend in the UK, in part because the banking system is skittish about allocating credit to many small firms.

Sports number markets in everything what would Oliver Williamson say?

Pitcher Roger Clemens gave slugging first baseman Carlos Delgado a Rolex, valued at $20,000, for uniform #21.  Former NBA player Vin Baker once bought his number from another player for the relative bargain price of $10,000.   In 2007, NFL player Jason Simmons used the opportunity to do a good deed, giving new teammate Ahman Green #30 if Green agreed to pay the down payment on a home for a disadvantaged single-parent family.

Former NFL punter Jeff Feagles is one of the few who has been able to sell a number twice — although with mixed results.  His first transaction, with quarterback Eli Manning, went smoothly, and Feagles got a family vacation to Florida out of the deal.  His second one, however, did not go so well.  When wide receiver Plaxico Burress joined the New York Giants in 2005, he bought #18 off Feagles in exchange for an outdoor kitchen.  But as of August 2010, Feagles had not received the kitchen. (Apparently, this was unrelated to the fact that by this point, Burress was in prison for accidentally shooting himself in the leg at a New York City night club.)

There is more to the article here, and my Dan Lewis source is here.  Of course, given that the players are now on the same team, these are more like repeated exchanges than at may first appear.

Marginal Revolution and the Martial Arts

It surely ranks high in the annals of the improbable that the August 2011 issue of Black Belt: The World’s Leading Magazine of Martial Arts contains an article (not online) in which your loyal authors are featured. Mark Hatmaker, writes:

Image: Martial monk

“I’ll borrow the phrase “marginal revolution,” a term coined by economists Tyler Cowen and Alexander Tabarrok. This esteemed duo defines marginal revolution as the tiny changes that can be made to a system that result in large changes at the end point–gold vs. silver, for example. These tweaks, these marginal improvements, are what steadily accrue into large rewards.

…Once you gain a fundamental level of skill and conditioning, you must make tweaks to nudge your progress upward. As a marginal revolutionary, you must recognize that small is fine, that shaving off one-tenth of a second can be an eternity and that one-eighth of an inch can be a great distance. Every gain is important, no matter how small.

The picture is from the Shaolin Temple. Here are previous MR posts on Kung Fu.

Hat tip to Carl Close.

Very good sentences thwarted markets in everything

“Such exorbitant commercialism must stop,” said Jan Tönjes, chief editor of Germany’s St. Georg magazine. At a recent show in Wiesbaden, he said, a woman tried to buy a rubber glove that the horse had spat on as a souvenir.

The article is here (interesting throughout) and for a related pointer (not to this passage) I thank Michelle Dawson.

The utility function

Wimbledon’s queuing public welcomes the abuse. In fact, the experience is such a delight that some daydream about it all year.

“We get to spend time together—no husbands, no children, no after-school clubs,” said Suzanne Pyefinch, who has queued for 27 years with her sister, Michelle, and seen everyone from Bjorn Borg to Roger Federer. Last weekend she was cooking sausages by her tent.

“Our bacon went off, and we had a bit of a panic,” she said. “The ice melted, and it just went funny in the car. But the important things are done. We’ve got the Pimm’s, so we’re happy.”

Ms. Pyefinch said she was still recovering from an encounter with a snorer. “That guy snoring last night, it was a song—fantastic, absolutely fantastic,” she said. “But you just get on with it. We all look like rubbish at the end of the two weeks, but we’ve had the greatest time ever.”

The article is here (interesting throughout) and for the pointer I thank John Chilton.

Why is recorded, non-live sports so boring to watch?

There is a new essay by Chuck Klosterman.  He lists several reasons why watching recorded sports events is such a downer, but he lays heaviest stress on a Bayesian argument:

2. “If this game has already ended and I don’t know anything about what happened, it was probably just a game”: This sentence is so obvious that it’s almost nonsensical, but I suspect it’s the one point that matters most. It’s the central premise behind the entire concept of “liveness,” which is what this whole problem comes down to.

…When you watch an event in real time, anything is possible. Someone could die. Something that has never before happened could spontaneously happen twice. When there are three seconds on the clock, not one person in the world can precisely predict how those seconds will unspool. But if something happens within those three seconds that is authentically astonishing and truly transcendent — well, I’m sure I’ll find out about three minutes after it happens. I’m sure someone will tell me, possibly by accident. You can avoid the news, but you can’t avoid The News. Living in a cave isn’t enough. We’ve beaten the caves. The caves have Wi-Fi.

Do you watch the live, non-recorded performance and enjoy the hope of a Black Swan?  The essay is interesting throughout.  I thank a  loyal MR reader for the pointer.

Bill James pursues serial killers

That’s right, the baseball guy with superb skills of pattern recognition.  The article is interesting throughout.  Here is one James proposal:

James also posits a way to reform prisons, which he dubs “violentocracies.” His proposal: smaller facilities that house no more than 24 inmates and are part of a larger, incentives-based system. At a Level 1 prison, for example, you get a lawyer, a Bible, and around-the-clock supervision; at Level 5, a cat and a coffee machine. At Level 10, you can earn a living and come and go with relative ease. The idea, James says, is not only to reduce the paranoia-fueled violence in large prisons but to encourage prisoners to work their way up the ladder.

The core of the article is more like this:

In reading so many crime stories over the years, James was surprised that so many weak descriptions are taken seriously, while so many good ones go unheeded. In his system, police would rank eyewitness accounts, from a few basic details about the suspect’s height or race (Level 1) to IDing your neighbor as he moves a body out of the garage freezer in broad daylight (Level 6). These scales could later be applied to James’ 100-point conviction system.

For the pointer I thank Brent Depperschmidt.

Should NFL players become like economics professors?

With the lockout ending today, free agency would seem to be in place:

In the union lawyers’ world, every player would enter the league as an unrestricted free agent, an independent contractor free to sell his services to any team. Every player would again become an unrestricted free agent each time his contract expired. And each team would be free to spend as much or as little as it wanted on player payroll or on an individual player’s compensation.

The NFL Commissioner presents multiple reasons why this is a bad idea, most of which are obviously hypocritical (some players might get paid less!, and yet the players mostly favor the new system).  The serious argument I can see is that of competitive balance, but a) do fans really enjoy competitive balance or do they prefer national stage mega-rivalries of titans?, and b) there are ways to restore competitive balance other than using monopsonistic collusion in the labor market.  Here is a serious economic analysis by John Vrooman (pdf), and it suggests persuasively that sharing venue revenue can remedy the revenue imbalance problem and restore balance to the extent that is required.

Here is James Surowiecki on this topic, he is not pro-owner.  I’ve yet to see any good reason to object to the new status quo, namely universal free agency in the NFL.

I have not, however, followed this issue closely.  Working on the Modern Principles text with Alex has, among other things, taken away from my consumption of sports.