Everyone's a winner

I was way behind the rest of the Interworld in catching up with the Eden Hazard ballboy kicking, but coming late has its advantages. As is presumably well known to followers of this particular competition, but not to others, the “ballboy” is a minor match official whose job it is to return the ball when it goes out of play. Traditionally, this was done by actual boys, aged in their early teens, who volunteered to help out in this way – giving out this coveted job being a minor perk for the senior officials of the club. Naturally, they were supporters of the home team, but this was unimportant.

But, now, it seems, the typical “ballboy” is a young man, under instructions to make life easy for the home side and difficult for the visitors. This is a new twist on the standard practice of grimy visitors’ dressing rooms with unreliable hot water and so on. All of this helps to create a home ground advantage.

This raises some interesting points about the business of sport.

Ultimately, it’s entertainment, and, in sport as in movies, most people prefer happy endings. So, the ideal sporting event would be one at which all the spectators saw their own side win. Given that these events are normally zero-sum games, that’s a bit difficult. But, if you set things up so that there is a substantial home ground advantage, then, most of the audience will go away happy most of the time. The other way to get the desired result is to set things up so that the same teams stay on top for a long time. That way, they attract more followers, who get to see them win most of their games.

TV changes things quite a bit. For a TV audience, there’s no difference between home and away games. On the other hand, and assuming a capitalist form of organization like that of Association football[1], the revenue from TV creates a virtuous circle in which winning teams get more revenue and therefore keep on winning. This process appears to reach a natural limit when two teams achieve complete dominance, while the rest play the role of Washington Generals to the Old Firm’s Harlem Globetrotters.

fn1. As you might expect, given their egalitarian culture, most American sports adopt a more socialist form of organization in which systems such as the draft are used to penalize success. The city-based franchise system ensures followers for teams that never win – in fact, there is even some cachet for teams that haven’t won in decades.

28 thoughts on “Everyone's a winner

  1. @Chris Warren sporting declarations have a long history in cricket. that is different from match fixing.

    Much of the organisation of markets emerged to overcome the risks and uncertainties of dealing with strangers. Many organisational arrangements arise to facilitate self-enforcing contracts and easy retaliation by consumers in the event of disappointment.

    Adam Smith wrote on the economics of religion because of its implications for overcoming the uncertainties of dealing with strangers. Smith offered a theory explaining participation in religion based on his theory of human capital,

    Businessmen by belonging to a strict religion that watched each other closely and expelled on the slightest infraction to signal that they were reliable people.

    Smith predicted that there would be more religious sects in cities because more people wanted to belong to strict sects to signal their trustworthiness to strangers.

    The property rights theory of the firm emphasises the costs of creating and enforcing property rights as the reason for the emergence of the firm. Transaction costs are the costs establishing and maintaining property rights.

  2. @Jim Rose

    But capitalist markets increase the risks and uncertainities of dealing with strangers.

    Capitalists struggle against organisational arrangements to enforce contract and to facilitate retaliation by consumers when they are cheated.

    Smith ignored how his society originally emerged.

    Mixing business and religion corrupts the commercial environment (eg Diem and his corrupt sister-in-law ‘Dragon Lady’) and often enough leads to assassinations and terrorism.

    It is more relevant to examine what Smith did not predict.

    Capitalist property rights emphasise returns based on siezing the property produced by others. This process increases transaction costs.

  3. chris, Pete Boettke has written extensively about how The Wealth of Nations is about social order among strangers. The market is a social order much larger than our span of moral sympathy.

    “In civilized society,” Adam Smith argued, man “stands at all times in need of the co-operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons”

    To realise this cooperation certain institutions must emerge such as private property and keeping promises through contract. The division of labour produces social cooperation among distant and different anonymous actors.

    The civilising influence of commerce is well-known as is it being the key to peace. We neither fear Russia or China because of extensive economic interdependencies makes any war pointless for all. The common market ended wars in Europe.

    This co-operation and peace is spontaneous product of Hayek’s concept of catallaxy which is “the order brought about by the mutual adjustment of many individual economies in a market”.

    See http://www.youtube.com/watch?feature=player_embedded&v=R5Gppi-O3a8 for Milton Friedman’s a discussion of Ipencil and how strangers cooperated in peace and harmony in the market even though they might hate each other if they ever met?

    Capitalism is a system which enables cooperation between millions of strangers so that they may jointly pursue their diverse goals

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