Friday, January 27, 2012
The dream of the economist soccer fan (by Francesc Trillas)
Thanks to the colleagues in the UAB Foundation program Study Abroad, I am teaching a course in "The Economics of Soccer". Teaching is learning, so I'm reading all the bibliography that I can. The class presentations can be followed from somewhere in my chaotic web page. I will be updating them. There are many fascinating issues. One of them is how long does success last, for example in the case of Barça. If one is a reader of the sports newspapers in Barcelona, it would seem that we are just living the beginning of an eternal era of success. However, a bit of rational thinking would make us more cautious, and realize that a combination of factors should conspire to trigger the beginning of a decline at some point. First there is the realization that luck plays an important role in soccer, and therefore reversion to the mean should apply in this field as in any other where radomness plays some role. Second, there is overconfidence: success reduces the defences against hypertrophic egos, diminishing motivation and pushing players and managers towards spending more time and energies in self-promotion and pet activities (or not so pet, but distracting nevertheless, such as becoming a celebrity or dating a celebrity). Finally, the rivals also exist, and they learn how to stop the leader and how to imitate it (although loss aversion from behavioral economics suggests that managers are biased against offensive tactics). Or perhaps the sports press is right: the youth academy in Barça will keep producing world stars (and Messi, Xavi and Iniesta are not just a lucky coincidence). Would it be the first time that the popular press is right and the scientific literature is wrong?