Ashes Combatants Understand Gains from International Trade in Coaches (AFR Piece)


Another opinion piece of mine appeared in today’s edition of the Australian Financial Review (Thursday 11 June), titled: “Free Trade in Coaches Gives All Teams an Edge” (link gated), on p.51. Alternatively, if you don’t have the hard copy, feel free to e-mail me a request.

It draws analogies between generalities of the virtues of free-trade (internationally), and the specific labour market for foreign coaches of national sports teams.

This is kinda topical in Australian media circles at the moment because of Australian Trevor Bayliss recently being appointed coach of England ahead of the Ashes (starting in 4 weeks time). Happy reading!

Rugby’s ‘Bonus Points’ Work – Policymakers Should Take Note (AFR Piece)


I had yet another opinion piece that appeared in this morning’s edition of the Australian Financial Review (Friday 22 August), titled: “Use Bonus Points to Encourage Crowd-Pleasing Play” (link gated), on p.35. Alternatively, if you don’t have the hard copy, e-mail me a request.

It discusses research I have undertaken with Niven Winchester (MIT) on estimating the effect of the try bonus in Rugby to alter behaviour of players and coaches to produce more attacking rugby to score more tries, which after all is what the punters want.

It develops ideas discussed in this blog a few years ago. The paper title itself is the somewhat more esoteric: “Secondary Behavioural Incentives: ‘Field’ Evidence on Professionals”…hopefully coming soon to a good peer-refereed economics journal near you!

More on Optimal Sequencing: Soccer Edition


[Cross-posted at: Wages of Wins Journal, 7 August 2014]

This earlier Wages of Wins piece by Shane Sanders (July 29, 2014) generated plenty of discussion. It highlighted the problem of Triathlon deaths in the swim leg. One crucial point to make with many economic policy analogies on which to draw is that sequencing of the legs (or phases) matters – all other considerations aside, the ‘best’ sequence of phases can be optimized according to some objective (in this case, minimizing fatalities).

One such possible economic policy analogy is with respect to unemployment benefits. Imagine a two-phase policy, where in the first six months the recipient is eligible to a relatively unrestricted entitlement of an amount according to some predefined percentage (say 40%) of some benchmark (average weekly earnings or minimum full-time wage). If the recipient is still unemployed after the 6 months have elapsed, a second phase kicks in at which the benefit is now highly restricted thereafter (having to satisfy minimum job search requirements, etc.) and/or reduced in value. Now, many people will disagree as to whether this two-phase policy is too generous or too miserly (or even on the basis of something else entirely). However, one aspect most of us would agree on is that swapping the sequence of these two phases would make absolutely no sense whatsoever.

It got me thinking about other such analogies about sequencing from sport that could be useful in policy circles. Recently, I published an article in the December 2013 issue of Journal of Sports Economics [gated], along with Jan Libich (my colleague at La Trobe) and Petr Stehlίk (University of Western Bohemia, Czech Republic). We took on soccer’s penalty shoot-out problem.  In knock-out matches that are tied after 90 minutes, the following 30 minutes of overtime is often beset with overly-defensive play due to insufficient incentive to attack.   This means that overtimes often finishes goalless, and that nearly 50% of the time, the match is decided via penalty kicks anyway (put differently: in nearly one of every two ties, overtime fails to achieve the one and only thing it is fundamentally there to do).

We show that an alternative sequence – regulation time followed by a penalty shoot-out followed by overtime – improves attacking outcomes. The qualification is that, while the shootout produces a winner – you still play overtime, with the winner of that winning the contest as currently. It is only when overtime fails to resolve the deadlock that the winner becomes the team that had won the shootout already (think of winning the shootout as worth half-a-goal lead at the start of overtime).

Specifically, we show that the probability of at least one goal being scored in overtime rises by approximately 50% (depending on the underlying characteristics of the match). Exactly how we estimate the effect of a policy that’s never existed is outlined in the paper for those of you who are interested to read further.

Coming back to sequencing, why the simple economic intuition (as well as the data) says this rule change will likely work is the following: there will always be one team chasing the next goal, because they will be eliminated unless they do – they have little else to lose. While the other team may correspondingly become more defensive, we show the net effect to be overwhelmingly positive. Furthermore, what you will no longer get are those overtimes where both teams sit back having jointly overestimated the probability that they will win if it goes to a shootout.

Had Mario Götze spurned that chance just minutes from time in the recent World Cup final, and it had have instead gone to spot kicks, the penalty shootout problem would now be far higher on the soccer agenda. Nonetheless, better public policy (optimal sequencing included) should never be far from the agenda, so I hope to see more studies like this make some impact in the broader public policy debate.

Anti-Tanking Policy in the AFR


My newspaper op ed piece appeared this morning in the Australian Financial Review (Thursday 31 July), regarding my suggestion to circumvent tanking in pro-sports leagues with reverse-order drafts (see also this earlier post) called: “Stop Tanking: Rank Draft Picks by Finals Exit, Not Ladder“. See p.51 of the hard copy if you have it, or e-mail me a request (the link is gated). The timing is excellent – these things are often talked about long after the incident itself, typically round about when rumours surface of an impending investigation (or even later). Far better to spotlight the issue before the damage might actually occur.

Solution to World Cup Penalty Shoot-out Problem: ABC Interview with Waleed Aly


I returned to ABC Radio National’s Drive program with Waleed Aly, yesterday evening (Tuesday 1 July, go to link for audio).

The 2014 World Cup now in its knock-out phase (which brings with it the inevitable problem of extra-time and penalty shoot-outs, as well as perverse incentive effects to both teams to over-defend). Shining a light on this, Waleed and I discussed a simple rule-change proposal, based on economic principles, which we believe would produce better scoring outcomes in extra-time and diminish reliance on the game’s cruel version of Russian roulette to decide the winner (among numerous other improvements).

If you’re interested in the economics behind the proposal, you can see the abstract of the article from Journal of Sports Economics (December 2013 issue), on which it’s based, here.

Media Misses Point on Cricket’s Decision Review System


[Archived from: The Conversation, 15 July 2013]

The first Ashes Test was indeed a veritable thriller. England edged Australia by a mere 14 runs, after an absorbing four-and-a-half days of action to go one-up in the best-of-five series. For those not well versed on the sport, only a dozen or so of more than 2,000 Tests dating back to 1877 have been decided by fewer runs.

Partly because of the closeness of the match, much of the media focus has centred on decision outcomes arising from the Decision Review System (DRS). This system, which allows up to two incorrect challenges per innings, is in economic terms a resource like any other – a scarce one, and one to be used, lest it be lost.

Opening with a disclaimer, I have absolutely no sympathy for my team here. No Australian cricket fans were complaining back in the pre-DRS era in 2008 when the Andrew Symonds incident in Sydney arguably turned the entire series against India in Australia’s favour. I could even excuse Doug Bollinger for his infamous dummy spit in Adelaide a couple of summers later against the West Indies when the system was still in its infancy, but by now there is no longer any excuse for such irrationality.

What is not in dispute is that the DRS has significantly reduced the incidents of incorrect umpiring decisions being allowed to effectively stand, relative to the previous status quo. This is also true in tennis, yet the consensus is that it works perfectly well in that sport. This helps tell the economist in me that there is very little, if anything at all, wrong with the system itself in cricket. But try telling that to various print and broadcast journalists.

Many local scribes over the weekend into today have sadly succumbed to the temptation to pander to the masses of their readership. Since Australian fans want to have our spleen vented in one united voice right now (among other ways) by reading what we want to hear – that “we woz robbed” – sports writers have a strong incentive to serve up precisely that, even if it misses the entire point.

As an economist, of ultimate policy-related importance is that what the DRS did was to re-assign some (albeit small) proportion of decision-making power from the umpires to the players themselves. But what is being ignored in the DRS discourse is the commensurate responsibility that comes with that power.

Sure, Aleem Dar’s third-day call on Stuart Broad was indeed a howler, and that wasn’t the only injustice served up by the men in white during this Test either. But why is it that no-one seems to be willing to give Australian captain Michael Clarke and his men the unconditional lambasting they deserve for willfully squandering their unsuccessful challenges like a bunch of drunken sailors on tour?

An argument here might be to say that (former Australian wicket-keeper Adam Gilchrist’s views on walking aside) professional athletes cannot be trusted for complete honesty anyway. So why bother holding them to account like we have always done to the umpires?

However, this argument is weak at best. In fact, if I were Stuart Broad, I too would have defiantly stood my ground. What’s more, rather than looking sheepish about it, I would have backed it up by giving the Australian players a right old bollocking – or perhaps sledging – telling them (in laymen’s terms) that if they were not so systematically and profligately quick on the trigger with their challenges, I’d be back in the pavilion by now…so suck it up, laddies!

Even more worrying was that the harsh lessons from the third innings of the match were not heeded in the final innings, when Australia once again exhausted their challenges early on (though they had already benefited once from one correct challenge). Imagine if Brad Haddin had not actually nicked the ball, yet were incorrectly shown the index finger.

Economics, particularly on the micro side, is about decision-making. I am yet to meet a cricket-loving microeconomist who thinks the DRS is anything but a solid system with an appropriate treatment given to incentives and strategy.

It is just a pity that the Australian cricketers have not yet woken up to their responsibility of mastering the art of rationality around it, and that commentators and writers have not yet learned to correctly apportion the fair share of the blame on the players for the so-called injustices that can still arise under the system.

‘Old Urn’ Itself Could Alter Aussie Ashes Tactics


[Archived from: The Sports Economist, 10 July 2013]

The oldest prize in Test cricket is once again up for grabs. Commencing earlier today, Australia is taking on England away from its own backyard in an attempt to regain the Ashes. Michael Clarke’s men have shown transparently that this one is the series they have the greatest desire to win, despite the old urn’s grossly underwhelming aesthetic stature.

Following its creation as the spoils of victory in series between these combatants in 1882 (though curiously never designated as such formally), its place in the sport as a bilateral trophy (one that can be won only by either of two teams) was unique for almost 80 years.

This changed only during the remarkable 1960/61 West Indies tour in Australia, which was capped with the minting of the Frank Worrell Trophy, to be contested thereafter between those teams. There has more recently been a real proliferation of these trophies, especially since the mid-1990s.

Currently, with 10 Test playing nations involved in World cricket, there are consequently 45 bilateral sets of opponents, and a total of 11 different bilateral trophies (effective since 2008) are now actively played for periodically, with Australia being the ‘worst offenders’, playing for 6 such trophies out of its 9 Test rivals.

Cricket fans – please feel free to disagree, but one’s personal view is that with the Ashes an obvious exception (given its history), many of these other bilateral trophies are surplus to one’s interest above and beyond the simple significance of the Test series and its ultimate result, and often play a role of little more than a shameless gimmick, and a diminution of the actual cricket.

Nonetheless, in any individual Test series, the simple tactical objective is generally to win the series, and if that becomes mathematically impossible or even improbable, a series draw is still better than a loss.

A complicating factor in cricket, however, is that there is no universal consensus – the ICC ranking system aside – on the value of a draw relative to a loss, unlike other sports where league points make this explicit (one-half in many sports, one-third in modern soccer). The existence of a trophy, assuming that ‘holding’ it really matters to players and fans, muddies the tactical waters, as the holder has to be beaten for the ‘silverware’ to change hands.

There is relevance in this setting of interest to microeconomists through incentives and strategy. Sporting contests have much potential to tell us economists more than a thing or two about the way firms behave in duopolistic industries where the competitors are not equally resourced.

Assuming there is some value to holding the trophy, potential follows for this value to skew attacking and defensive tactical decisions of both captains, comparative to the identical series scenario where there is no trophy on the line.

This upcoming series can be used to illustrate a textbook case of how a bilateral trophy being at stake may just alter team behaviour at the margin. However unlikely you think it, suppose the series is level at 1-1 after four Tests, and that late on day five of the fifth test, the final and deciding game is on a knife’s edge (and that a draw is still a comparable possibility).

Since 1-1 is not good enough for Australia to return home with the prize (England currently holds the Ashes), it is easy to envisage how Michael Clarke would throw caution to the wind to give his XI every possible chance of winning the decider, not to mention what Alistair Cook’s ‘game theoretic’ tactical response might be.

In the counterfactual that there exist no Ashes for him to regain, rather it’s purely the series outcome that matters, one might imagine how he may turn defensive to suffice for a draw and (arguably) claim a moral victory in levelling an away series against a significantly more favoured team. The inclination for him to do this might be accentuated if his captaincy and/or personal form were under scrutiny during the series, with equal honours perversely providing him some measure of vindication.

Even if you summarily reject any possibility that Clarke would ever sway toward that tactical inclination, you might be willing to accept how Zimbabwean skipper Brendan Taylor would analogously almost certainly opt for any stalemate within reach at the death of an away series to their neighbours – the World top-ranked South Africans.

At any rate, I suspect that fans of Australian cricket will have a wide range of views about how they will feel about a drawn series. Many will consider it equivalent to a series loss, since the Ashes are not regained either way. Others like me, with the recent 4-0 whitewash in India still fresh in the mind, will still take some matter of pride in averting a third successive series loss against the old enemy.