Highly linkable

Google, the great disruptor, is at it again this time targeting TV.

All those beauty queens may finally get their wish.

This one from Megan McArdle is heavyweight great. Far too often the simplistic analysis of policy advocates fails miserably to fully appreciate the nuances and complexities of life and its tradeoffs.

Angus points to a paper showing that 401(k) plans can have hidden and unavoidable pitfalls.

More sharing is made possible through technology. This time it involves ad hoc tasks. The future isn't plastics as much as it is butlers and maids for the masses. (HT: Mark Perry at Carpe Diem)

Far be it from me to advocate more regulation, but the NCAA is a government sanctioned and subsidized monster that may need some babysitting. Here is a nice start.

John Cochrane raises some quibbles but largely agrees with Greg Mankiw's take on Au.

Steven Landsburg shows us one awesome version of the Game of Life. (Warning: the nerd indications are high on this one.)

Here at MM we love sports ticket intermediators (pejoratively also known as "scalpers"). Here is a great video arguing our point.

Flooding the sports autograph memorabilia market

This past weekend was Meet the Sooners Day for the Oklahoma Sooners football team as the kicked off the start of fall practice. I would assume that this fairly common event throughout college football shares the same rules, which attempt to keep it child-focused. Those rules specify:

Each child may be accompanied by a maximum of one adult, but adults will not be permitted to submit items for autographs.

Each child may bring ONE item to be signed - no exceptions.

These rules are designed to keep Ernie eBay from having all the start players and coaches sign 15 items all to be auctioned off to the highest bidder. This leads me to some thoughts:

1. Is the university or athletic department opposed to sports memorabilia? More specifically, opposed to a secondary market in sports memorabilia? Do they find it unhealthy, unwholesome, and this is a way to somewhat defund it? If so and setting aside the silly moralistic position, I think they are going about it the wrong way. I'll elaborate shortly but in another point because I find it unlikely this is the primary cause.
2. I do think there is some highbrowishness supporting the motives, but I generally think it is a genuine and legitimate attempt to be mindful of the players' scarce time (minimally exploitative for a change) and direct the benefits to the most deserving group (children).
3. Are the universities, athletic departments, and the NCAA missing a revenue opportunity while at the same time missing the best method to limit or control the secondary market? I think the answer here is a resounding yes. I think with two actions Meet the Sooners Day would be all about the kids without the rules needed to make it so. 
• Organize a signing by the entire roster on a limited number of sports items to be sold through the athletic department. Johnny Manziel purportedly was paid $7,500 to sign 300 mini and regular-sized helmets. These would be "authentic, originally-signed" autographed items. 
• At the same time take an electronic image of each player's signature. Use this to mass produce signed items. This essentially floods the market for signed goods taking away most of the impetus for others to duplicate these efforts.
4. Of course these business actions might be a bridge too far making it obvious that a third action would be necessary to avoid charges of exploitation--give the players the proceeds of these sales.

Update: seems the NCAA was already taking a bridge too far, http://www.cbssports.com/collegefootball/blog/dennis-dodd/23070728/ncaa-to-exit-business-of-selling-schoolrelated-online-items

If Marie Antoinette lived in a glass house, would her pot and kettle be black?

So I'm mixing methaphors . . . and stealing one in this case. Bob Stoops, the University of Oklahoma's rather well-paid football coach, made some comments the other day to the Sporting News regarding college football players' "pay". Having read the article, I'm not nearly as worked up as I was when the comments were related to me--so much for the reliability of hearsay.

The part where I'm stealing a metaphor comes from The Oklahoman's columnist, Berry Tramel's, article. I think he gets it basically right: message wasn't so bad, but delivery including the messenger is a problem.

Stoops' message is an argument worth having: that college football players do get paid in the form of scholarships, tutoring, athletic training, etc. Of course at some point the NCAA's basic message would be in conflict with Stoops' in that all the TV ads the cartel runs keep telling us that college athletes are almost always "going pro in something other than their sport". So much for the value of the training.

I read that Stoops says he is all for stipends. So maybe we are just arguing about the form and structure of how college football players, et al. should be paid. But if he wants to argue that a scholarship is of high value to an athlete, and let's remember that value is subjective (i.e., wage value is in the eye of the laborer), then there is a simple test we can conduct. Let athletes choose between full scholarships and the comparable amount in after-tax income. Stop making them attend classes unless they choose to attend and pay for college. If Stoops is right, then not much should change in the college football landscape.

PS. To those who would invoke the silly argument that college football players would make a foolish choice taking the money instead of the education, I'd say be careful the point you raise. Are you sure you know better how adults (nearly all college football players are adults) should live their lives than they do? If college football players are so foolish or short sighted or subject to bad decision making perhaps due to adverse influences in their lives, then are we sure no one other than the people profiting off of their labor should be making these choices for them? Are you sure college is as valuable as you think? Have you read Charles Murray? Are you sure all universities are created (and continue) equal? Does the fact that 115,000 janitors hold bachelor's degrees give you pause? How would you characterize "The Great Gatsby"? Was he . . . uh  . . . great!?

Highly linkable

I'm back from my unintentional hiatus. Now that my bracket is busted and other things have been put to bed, at least for a while, I can get busy with a lot of blogging that has been on my mind. To begin, let's get some good links in.

Megan McArdle takes just six minutes in this Cato Daily Podcast to very effectively explain what insurance is and what it is not and why Health and Human Services Secretary Kathleen Sebelius is in the camp of confusion. The all-too conventional wisdom is that insurance is about a transfer of expense, but this should obviously be nonsense. How could a redistribution scheme be a profitable endeavor? Insurance is rather a transfer of risk.

While we enjoy the excitement of March Madness, let us not forget the madness that is the non-free market of college athletics. Dave Berri has a column on Freakonomics asking simply, "How about a free market for college athletes?"

Speaking of Freakonomics, if you'd like a scary example of how quickly a consortium of "experts" can slip into technocratic thinking and tyrannical behavior, listen to this Freakonomics podcast on fighting obesity. There was a strong vein of Kling's oppressor-oppressed narrative running through these progressives.

John Cochrane explains why boogeyman-like fears of genetically modified organisms (plants, foods, etc.) is not only misplaced, anti-science, and anachronistic, but it is also very bad for the poorest among us. GMO just ain't the big, bad wolf.

Finally, Stephen Landsburg makes a point in principaled agreement with me by showing in two videos how magnificently wealthy we are.

Who benefits from recruiting deregulation?

The media tend to follow conventional wisdom. Sports analysis is much so the rule than the exception. Here is case in point #342 . . .

CBS Sports is guilty in this case by failing to connect the dots to the obvious--that Alabama has more to lose than gain in the NCAA's new recruiting deregulation. 

Here is the big surprise:

But, according to al.com, Saban told Birmingham's Over the Mountain Touchdown Club at its Monday banquet that he didn't think the changes were necessary.

"I'm kind of happy with the system we have now," Saban said. "To use the idea that, 'We can't monitor it, so why don't we just make it legal?' I don't buy into that at all. It's like saying, 'People are driving too fast. We can't enforce the speed limit, so let's just take the signs down and let everyone go as fast as they want.'"

No kidding he's "kind of happy with the system we have now". So was Pan Am in 1974 happy with airline regulatory policy. Saban is effectively responding to the question should the NCAA change with, "No! I think you should stay the same wonderful person you are today." Unfortunately, this change is just a change in clothes. Real reform will be met with much more kicking and screaming.

CBS is also guilty of confusing success with wealth and power:

It has been widely speculated--including by [Georgia athletic director Greg] McGarity himself--that wealthy programs like Alabama would gain a competitive advantage over less-wealthy schools by employing whole staffs of recruiters.

Georgia is a "wealthy" program. Georgia is on the same side of this as Alabama. It is the Georgia Techs and Boise States of the world who stand the most to gain from NCAA ease up.

Looking to the example of OU and OSU, it takes one wealthy donor to elevate a program to much higher plateaus. But staying there is made very difficult in a world where competition is limited in scope and scale. By removing certain dimensions of differentiation and competitive advantage (that is by having stringent recruiting rules as there are currently), the NCAA helps Alabama, et al.

The Heisman isn't what you think it is.

In a few hours from my writing this post the winner of the 2012 Heisman Memorial Trophy will be announced. The mythology and atmosphere of the prize are perfect for what the Heisman is, a beauty contest, but they mislead the many into believing there is an objective order at work. Kevin Gemmell at ESPN.com has a great article defending the Heisman, and I have to agree with many of his points. However, he stops short of a meaningful understanding of the key difference I believe I have identified. Namely, that we are recognizing someone who has lucked into winning the beauty contest rather than definitively achieved the status of "outstanding college football player in the United States"--the trophy's official meaning.

Here are my main faults with the Heisman:

• It is ironic that in the most quintessentially team team sport, the most celebrated individual award at the college level is bestowed. We should already be suspect that there is less meaningfulness in the award than conventional wisdom holds.
• There is certainly an element of Keynes' beauty contest going on in the voting where voters are attempting to vote a ballot they expect others will respect. The easiest way to do this is to vote congruently to the perceived typical ballot. 
• But at the same time there is rampantly poor voter performance including nearly fraudulent behavior. Leaving candidates off ballots because including them hurts the chances of a voter's preferred candidate undercuts the legitimacy of the award. Voting early is also a problem. The bias in voting cannot be overlooked when evaluating if the process is flawed. 
• The criteria is unclear and inconsistent. Gemmell holds this as a feature, not a bug. He may be right, but it still argues against the idea that this process produces an objective result. Running with that a little more, we have to recognize that statistics drive this award. And not just any stats, cumulative and simplistic stats. Stats that have little to do with a team winning football games but a lot to do with an individual winning awards. Stats that are highly correlated with winning but that have weak casual or predictive effect on winning. That is a very key distinction. Do you realize that most teams who lead the game at half time go on to win the game? If you find that meaningful, reread the sentence again until it fails to impress you. Coffee is for closers. If stats are your guide to Heisman immortality, they should be stats that indicate contribution more than just participation.
• The pretentiousness of the prize must also be mentioned. For all the reasons above, we cannot be so pious when considering the prize. 

If we gave a Heisman Trophy in business, Apple would win for its beauty narrowly edging out Wal-Mart who is a finalist based on size. Yet, the goal of business is to make a profit. Both of these firms are very profitable, but Microsoft achieves about 50% more profit per dollar of revenue than does Apple and Exxon Mobil is more profitable than Apple and Wal-Mart combined. The goal of a football team is to win games and the objective of an individual football player should be to contribute to his team's winning. Just as our hypothetical Heisman Trophy for business is recognizing the wrong firms, the real Heisman Trophy is flawed in process such that the recognition fails to be very meaningful.

Truthfully, I am more impressed by awards like Oklahoma's Don Key Award. From SoonerSports:

Oklahoma coaches describe the award as the highest honor an OU football player can receive while playing for the Sooners. The Don Key Award is the only individual award given in Oklahoma football. It goes to the player who best exemplifies the many superior qualities of Key, both on the field and in the classroom.

That award is subjective, but it is limited to the subjectivity of a highly informed coaching staff. It goes to the player or players who contribute to the team and achieve individual success almost as a byproduct.

The difference between winning and losing

Oklahoma football coach Bob Stoops likes to say, "there's a big difference between winning and losing." Generally this in invoked after a narrow victory especially when the opponent was supposedly over matched. Here is an example from the 2002 season describing the 37-27 victory over Alabama where OU had blown a 20-point lead. And here is an example from the 2004 season describing the 42-35 victory over Texas A&M. But here is an example from this season where he is seemingly contradicting the often repeated mantra. Last night's thrilling Bedlam game gave Stoops another chance to claim that the difference between winning and losing is a vast gulf. So far, I don't believe he has.

I am not aiming to indict Bob Stoops for this common but nonetheless faulty reasoning. Many coaches in many sports have said the same. But I do want to take this opportunity to dispute the idea that a narrow victory is a substantial victory, and I will be using OU as my example. I had planned this blog post before last night's game. What an interesting coincidence that the game was a perfect example for the case I will make.

Missed it by that much

Stoops, et al. have it backwards. There is actually a very little difference between winning and losing in general in life and especially in college football. College football outcomes, like in the NFL, are surprisingly largely driven by random chance. For the NFL, Brian Burke estimates that over 50% of the outcome is random. I've made similar calculations to those of Brian to come up with a 60%-70% share of college football outcomes attributable to random chance. That alone should give us pause. If there is a lot of randomness (a large error term) in football outcomes, how much or little credit can we attribute to everything else?

Let's think about the difficulty in evaluating performances ex post without letting the actual outcome bias the appraisal. Consider a comeback against a lesser opponent that falls short versus one that succeeds. Suppose the game ends up being decided by a last second field goal attempted by the team favored to win. Make the field goal, and the commentators will look back on a splendid series of gritty plays that made the difference. Miss it, and the same commentators will describe how inept was the entire performance. This isn't consistent. All of the performance was the same up until that one single play.

So it turns out that a "brilliant" throw by a quarterback threading the needle between two defenders for a touchdown and the same throw being "ill advised" when intercepted can impact both the outcome of a game greatly as well as how we feel about that outcome. The random factors that govern the success of such a high impact, high sensitivity event are probably the critical factors, and they can cut either way. It seems there really is a fine line between stupid and clever.

OU was close, very close, to winning the BCS National Championship in the 2003 and 2008 seasons. A handful of plays against LSU and Florida, respectively, went a long way to determining those championship games' outcomes. But it would be inconsistent to hold that view about those seasons and games while clinging to the Big Difference theory. If the Big Difference is true, OU was a long way away from holding the crystal ball. Similarly, the Sooners were able to ever so narrowly escape numerous tight situations in their 2000 title run. Oklahoma State was a few fingertips away on a last-second, touchdown pass to ending the dream season. But for a few heroics at Texas A&M two weeks before the OSU game and in the Big XII title game against Kansas State, OU would have been out of the hunt. In the championship game itself Florida State came very close to winning.

Here are the lessons to draw from this:

• It is not the actual outcome of specific close events that matter so much as the entire volume of evidence. 
• As distasteful to some as it is, margin of victory matters. Prediction models for college football among others are significantly enhanced when margin of victory is included rather than just win-loss results.
• Whether declaring the strength of the mandate a close election has created for a winning candidate or trumpeting a narrow victory on the gridiron, the logic is flawed. We need to be humble and reasonable in our assessments. That includes working hard to not let the outcome bias the assessment. 

Congratulations to both the Sooners and the Cowboys on a great game filled with wonderful excitement. As a fan I can write that more easily because my team prevailed. I know that my joy is not equal to the pain felt by Cowboy fans, and, perverse as it is, my joy is enhanced knowing they suffer and what that suffering feels like--I've been on the other side. I am very happy the Sooners won. I'm not sure if I wish they could have won 51-0 rather than 51-48, but I am sure a 51-0 outcome would mean a lot more.

Update: edited to correct a few grammatical mistakes.

Arguing against the Infield Fly Rule

Over at the Sports Law Blog, Howard Wasserman continues to try to make the case for the Infield Fly Rule but worries that his four-point test is running into a problem considering the "kneel down" or "victory formation" in football. Here is the essence of his concern:

This will expand on The Atlantic piece. In that essay, I identified four features of the infield fly situation that justify a special rule: 1) The fielding team has a strong incentive to intentionally not do what they are ordinarily expected to do in the game (catch the ball); 2) the fielding team gains a substantial benefit or advantage by intentionally not doing what is ordinarily expected (this is the prong I want to flesh out in economic terms of optimal outcomes, costs incurred, and benefits gained for each team); 3)the play is slow-developing and not fast-moving, so the player has time to think and control what he does; and 4) even doing what is ordinarily expected of them, the opposing players are powerless to stop the play from developing or to prevent the team from gaining this overwhelming advantage.

As I said, I believe the infield fly is the only situation in all of sport that possesses all four features. But in conversations with friends and readers, one situation keeps getting brought up: The kneel down (or "Victory Formation") at the end of football games.

I like his reasoning with the four-point test, but ultimately I believe it fails. I don't like the IFR generally. And I think this test does not sufficiently justify it (or change my mind). Below is the comment I've left on his post. Check out his entire post, and judge for yourself. The Sports Law Blog is a thoughtful source I follow regularly and generally don't quibble with. Messing with those guys is like a sixth grader picking a fight with the entire seventh grade.

My comment:

I really like your reasoning, but I ultimately believe I disagree. 

I think the example of the kneel down is problematic in a few respects. On point one especially but touching on the others, this seems an incorrect or arbitrary description. We should ordinarily expect that an offense is doing its best to continually put its team in the best position to win. This includes running the ball in a play that is unlikely to gain great yardage much less score but that puts the team in a position to score later on. It also includes running to force a trailing opponent to use valuable time outs to stop the clock. It also includes taking a safety rather than give an opponent very good field position for a touchdown opportunity. It also includes (last one, but I think these are progressively important) a defense that intercepts a ball late in a game thrown by a trailing team's offense falling down rather than advancing the ball and risking a fumble. 

If we are to take your four-point test and apply it to football, it seems we must start making a lot of judgment calls restricting these types of plays among others (my apologies for the redundancy, but this is a new point): An offensive team running the ball and falling down in bounds late in the game on 3rd and 20 to force the opponent to use a time out; A team taking a safety on purpose; A defense that is winning late in the game not advancing an interception because of the risk of fumble. My problem with the four-point test is not so much that it will have to be applied to so many other situations potentially, but that I don't find the IFR to be such a problem. It is a bang-bang, during the regular course of play event that happens to create both a situation of advantage (IFF executed properly) for one team as well as the time to execute it. This happens a lot in all sports. Should we prohibit fast breaks in basketball if enough of the defense is not able to contest the play? Should we force a football team on offense, up by one point, with one minute to play, and with no opponent time outs to score a touchdown when they would rather run out the clock and disallow the opposing team's offense from getting the ball back (reference: NY Giants versus NE Patriots in last year's Super Bowl)?

The King knew that great inputs were essential

Barry Switzer was one of the greatest college football coaches ever because, among other qualities, he was one of the greatest college football recruiters ever. Great talent building is a necessary component for success in any team sport be it through recruiting, drafting, or trading. The league structure will dictate the form the talent building takes. It is up to the management to maximize the opportunities given constraints. That sounds a lot like choice under scarcity, and it is, and that sounds a lot like something economics can help shine light on, and it is as well.

Obviously, a college football team would ideally be composed of the top 25 players by position to be drafted by the NFL each and every successive year. Well, that isn't actually obvious. Many of those players don't work out so well for reasons including the NFL isn't perfect in drafting the top performers in order. Tom Brady was a sixth-round pick in 2000 and was the sixth quarterback selected that year. Already we have a knowledge problem, and that is before we get to competition for resources and other factors driving scarcity. It is important to note at this time that the knowledge problem has two dimensions: (1) how well a player can play, and (2) how well a player will play. Neither is fully knowable even by the player himself. The player may think he coulda been a contender, but believing that does not prove it to be so.

Here is how I break the two dimensions down. The first I generalize under the heading "athletic talent". The second I generalize under the heading "grit". Each encompass many components.

Athletic Talent would include:

• Athletic skills within the sport
• Athletic skills in general
• Intelligence

Grit would include:

• Ability to be motivated
• Ability to motivate
• Desire
• Work ethic
• Attitude

Notice that a basic level of both groups of attributes are necessary. Notice also that each should complement the qualities of teammates and the team where the whole is greater than the sum of the parts, but grit probably plays a bigger role here than does athletic talent. This gets us to the tradeoff aspect. Here is where economics comes in.

The first dimension is higher profile and more easily observable, albeit with a significantly large standard deviation. The recruiting services don't give stars for determination to succeed. Their recognition is much more closely aligned with record-setting stats. From the start coaches will be biased toward recruiting with a heavy emphasis on the first dimension. The fan, donor, administration, and peer group will expect it up through accepting it as an excuse when a player under performs.

The best examples I have where a player exhibits the extreme case of having a lot of one dimension and a little of the other are Marcus Dupree with extremely high athletic talent but little grit and Wes Welker with slightly above average athletic talent and extremely high grit. A better example than Wes Welker would be a player with the grit but who failed because of a lack of talent. But that player doesn't exist because of the factors mentioned in the prior paragraph. In recent years Boise State had a lot more grit but probably one level less athletic talent than did Texas. The players recruited into each program most likely had a lot to do with this. Of course there were other contributing factors, but the point remains.

My simplistic approach to recruiting for the realistic ideal college football team is a great quarterback (extremely high levels of both dimensions) surrounded by above average athletic talent and highly above average grit. Yes, I said it was simplistic--probably should have said obvious too. But I don't think the process employed by many or any college football programs actually works this way. I think the process is actually a great or above average quarterback surrounded by highly above average athletic talent and average grit. And these are in all cases the goals of which a program will fall short in varying degrees of magnitude. Categorize this under the heading educated conjecture. I am sketching out an argument and theory not finalizing a thesis.

If we were to approach college football recruiting for a Moneyball angle, I believe this would be it. Athletic talent is the expensive input; grit is much less well paid. Where possible, trade athletic talent for grit at the margin. What this would mean in practice is being not very choosy when looking at players high in athletic talent--a three-star and a five-star might be nearly equivalent. You'd be looking for indications of grit where a little goes a long way to make up for relative athletic talent shortcomings. The first and most basic filter would be athletic talent. Get that out of the way quickly, and then focus the majority of your resources filtering on the dimension of grit.

Let's get up a football league

Legend has it that one day in 1895 while sitting in Bud Risinger’s barbershop on Main Street in Norman, Oklahoma John A. Harts spoke some famous words: “Let’s get up a football team”. From there the Sooners were born.

The NCAA has approved what seem to be significantly more powerful sanctions on those who break the cartel’s rules. Be sure to read the article at SI. This comes as a response to the fact that the rewards from “cheating” are greater today by an order of magnitude than they were in decades past. NCAA czar president Mark Emmert recognizes as much:

We have sought all along to remove the 'risk-reward' analysis that has tempted people - often because of the financial pressures to win at all costs - to break the rules in the hopes that either they won't be caught or that the consequences won't be very harsh if they do get caught. The new system the board adopted today is the result of a lot of hard work and membership input devoted to protecting the collegiate model.

Unfortunately for the cartel, this is a losing battle in a soon to be lost war. Besides the growing sentiment against the NCAA’s practices, this change reflects the stakes growing in the sports world. The attractiveness of an alternative model wholly removed from the grip of the NCAA is higher than it has ever been. King Cnut Emmert will not halt this rising tide.

Sports roundup: October 28th

Here is my take on a few sports results and sports-related news. From my perspective these are three stories of losing.

First the big one for me, Notre Dame defeated the Sooners last night yet again. I was very impressed by Notre Dame's game plan, execution, and grit. I was also "impressed" by the officials ability to call a questionable holding penalty on an OU touchdown, miss a pass interference call in a play that had an "interception", and then also miss after review that the ball clearly was trapped on the ground in that  interception. These were critical plays that could have changed the outcome. But I definitely recognize that the team that played better last night won the game.

Because they remain relatively untested for the rest of the season, it will be hard to assess to what degree ND is great versus to what degree OU is just above average. OU has played two very highly ranked opponents this year and underwhelmed in each case.

OU is now 1-9 against the Irish. It is interesting how a team can seemingly "have your number". Those of us at MM know that the number to have is sample size, and that is the key here. This small sample size just doesn't tell us much at all about how great and evenly successful both programs have been. The sample size being so small makes it very susceptible to selectivity bias. In this case some of that is opportunistic while most of it is pure chance. Notre Dame never played a Switzer team and they managed to avoid quite a few Wilkinson teams as well. They've only played Stoops twice catching the Sooners in relatively down years. OU and ND were supposed to play in 2000 and 2001, but it is my understanding that ND bowed out of those appearances.

I can relate to Notre Dame fans in ways I can relate to few programs' fans. They are a highly successful organization with the highest expectations year after year. That makes it hard when losses come. OU's season is now a bitter disappointment for me and most OU fans. When your goals are to compete for conference and national titles, the bar is set very high. It looks very hard for OU to still win the Big 12 this year. Winning the remainder of the games including a bowl game by 50 points would only bring to high relief the disappointment of not completing what would then look to have been possible. This is classic loss aversion as described by behavior economics. Losses hurt more than wins, and that diminishing return affect is greater and greater as winning is more and more expected/achieved.

The pageantry last night was second to none. I was very impressed by how it all came together. We put on a beautiful show for the Irish to fondly remember.

Switching gears, let's mention something about the Harden trade by OKC-Houston. This is striking many as a major WTF? Those sentiments may prove off the mark, but from what we know and see now, the head scratching appears reasonable. Harden is great and valuable. So, either Presti mistakenly estimated value (direct revenue from winning and brand strength and indirect from chemistry) or Simmons overstated the economic upside for the Thunder. There is a chance this tension is looking in the wrong place. The Thunder ownership could be loss averse in the financial sense. They aren't willing to make the investment and pay the luxury tax to effectively bet the come on future gains being worth certain extra expense. They could also suffer as an organization from several behavioral economics shortfalls including optimism bias and overconfidence effect.Or maybe it was spite: Harden wasn't showing "loyalty" and knowing his place as a sixth man. It wouldn't be the first time NBA owners asked not what a player deserved but what that player could give to the cartel organization.

One last topic, the double injustice of Tyrann Mathieu of LSU. The Honey Badger worked hard for negative current wages in the 2011 season for LSU. While not being reasonably paid for his labor, he brought happiness to LSU fans and profit to the LSU athletic department. Contemporarily and subsequently to that season he apparently chose as an adult old enough to die for his country to use some chemicals that are deemed highly naughty. Now his expected future wages are a slight fraction of what they were nine months ago. His life has been a tough and at times sad one. NCAA policies and U.S. law have made it tougher and sadder with less hope.

Fair market value soon the norm, theft soon the abnormality

A few thoughts on ticket prices for events, sporting and otherwise. My familiarity is with sporting event pricing, but I assume most of this translates to other types of events pretty well.

Overall, I am optimistic that we are getting more rational and moral as a society regarding ticket pricing. Secondary markets are more acceptable including the important feature of tolerance for above face value pricing--scalping as the greedy call it. Notice the greedy here are those who expect to only and always pay at most face value for a ticket. Nevermind the inconsistency of failing to pay face value for tickets they do not want, but expecting the ones they do want to come without a premium.

Largely the good trends are direct and indirect products of technology. Directly because the Internet allows us to transact and make a market in tickets at very low cost. These markets are getting deeper, more transparent, and faster while at the same time offering enhanced service like views from the seats a buyer is considering purchasing. It is also becoming more of a commodity, which is also a good thing unless your paycheck has Stubhub at the top of it. The network effects will help the biggest and best market makers retain market share, but the steep fees are not long for this world. Watching the creative destruction in this market has been interesting over the past 15 years. The rise of local dealers who played a great role physically connecting buyer and seller has been supplanted by electronic exchanges including bar codes that make physically delivery unnecessary in many cases. We've gone from street speculator to the bourse to the NASDAQ in a decade.

Indirectly technology affects the trends by allowing the seller to be anonymous. It is tough to look into the eyes of a father standing with his son asking the price and rightfully tell him the market price is a 100% premium above face value. This is becoming a sellers' market in many cases but still with many benefits to the buyers. Efficiency cuts both ways. Technology also favors a different type of seller that may be more appealing to buyers; hence, above face-value pricing may be more acceptable. Soon the "jerks" won't be in the middle buying up tickets and selling them [when they can] at a premium. You know, the jerks who stand in the rain waiting for me without any promise that I'll come just in case I want to attend the event. But middlemen (more likely the needs for some kind of middleman) do not always go away; often they just adapt.

The feeling among those for whom it is important may be, "When I purchase online, I know I'm buying from the original season ticket holder who just happens to be unable to attend the game. I no longer must contend with the [dreaded] scalpers." But that feeling is probably wrong. The middlemen are there and probably always will be, thankfully, hopefully.

The evolution of a rivalry

This weekend was the annual Red River Rivalry, one of the greatest rivalries in college football. It has a remarkable and storied tradition. For me it was my 29th in a row to attend. During that tenure, I've seen it all, and I can say that in a way I believe few true sports fans can match. My deepest agonies of defeat and greatest joys and thrills of victory in all my sport spectating have come in that Cotton Bowl stadium in the middle of the State Fair of Texas in Big D, half-way between Norman and Austin.

As much as the experience has maintained its continuity, there are a few significant changes that have taken place. I have watched as that game and the weekend that surrounds it has evolved over time. It is unmistakably a more subdued, sophisticated, and superficial affair. For the most part these changes are good. A little of the pure rivalry is lost, I believe, but on the whole it is a better environment. Some of the changes have been:

• The center of fan pre game (night-before) activity has moved away from the rowdy and rough areas like Deep Ellum and the West End and into the tony Uptown and stylish Knox-Henderson.
• Yelling at, taunting, and otherwise verbally berating opposing fans is generally gauche and rare.
• Wearing team colors the night before is rare rather than the norm (this contributes to the prior trend).

In summary the behavior is better, the environment cleaner, and the atmosphere more sophisticated. 

Most of this, probably 80%, I attribute to the wealth effect. We've gotten a bit wealthier in both fan bases overall, but in particular the selection of fans has probably gotten considerably wealthier. The explosion in sophistication in Dallas, some of it genuine wealth, some of it the so-called $50,000 millionaires, has attracted a different crowd to the game. These fans are willing and able to spend much more for the OU-TX experience, and they crowd out other fans that more resembled what I saw in the mid-eighties. Also, the relaxed attitude generally for secondary-market ticket sales, read market prices, have further pushed out the fans of lesser means. 

The remaining 20% or so behind the evolution would include the significant downturn both teams experienced in the 1990s. This surely washed out some of the marginal fans. Also, the general encouragement of respectfulness would seem to have played a role. This attitudinal shift started at OU around the time of Stoops' arrival, but I believe it was incidental to him per se. Lastly, the extreme and probably over-the-top police enforcement during the 1980s and 1990s in Dallas surrounding the OU-TX game stands out. For a while they seemed intent on taking away the fun as the took brawlers off the streets and made what I witnessed to be arbitrary arrests of public drinkers (not drunks, mind you). There were literally invisible lines that once crossed would land you ziptied on the curb without warning. 

Again, I think the evolution is overall positive, but some of the spirit is lost.

PS. There is nothing like beating Texas. Boomer Sooner!

Thoughts on the OU loss

It is unfortunate but fitting that my first blog post about the OU Sooners would be on the heals of defeat. As I hope to explain in a later post, it is the rare events that receive our attention and thoughts whether warranted or not. Here are some brief thoughts on Sooners football.

Landry Jones is not an NFL quarterback. In fact, he is not truly good enough to be OU's multiyear starting quarterback. Unfortunately, it has taken until his senior season (fifth-year senior at that) for us to discover that fact. Well, there was reason to believe that was the case often times last year, but in truth and in the defense of the coaches paid handsomely to make these determinations it is a loose, vague, and indeterminant type of decision. There is nothing very cut and dried about it. Only after the fact do we even have a chance of seeing the error or virtue of our prior decisions in these matters. And it is not as if there were a lot of alternatives. The only option that seems likely to have been true is an alteration in the offense the past couple of seasons especially the fuller integration of Blake Bell into the fold. More on that below.

In the Stoops era the following quarterbacks have proven to be worthy of unconditional starter status:

• Josh Heupel
• Jason White
• Sam Bradford

In that era these quarterbacks proved to be worthy of solid backup status:

• Nate Hybl
• Paul Thompson
• Landry Jones

Any others didn't have enough time at the helm for a proper decision to be made. And a change in a few circumstances might move any of the above from one list to the other. 

It is with careful consideration that I place Landry on the second list. He certainly had his shot at the first. Many times he made a case for being on it. But I believe the entirety of the evidence rightfully places him on the lower level. He is making more critical mistakes as a senior than Bradford made as a sophomore. Which leads to my evaluation that he is not an NFL-level quarterback. By that I mean a serious contender to play an extended role (>1 season) in the position. 

Landry has the following shortcomings:

1. He exhibits poor decision making.
2. He cannot reliably hit the deep pass.
3. He does not handle pocket pressure well.

My prediction is he goes in the late second to early fourth round in the draft and is out of the league within 2 years. I certainly don't wish him ill. I very much admire what he has accomplished--holder of numerous, significant OU records, which says a lot about how close he has been from being elite. I believe he is a good person of strong character and a great athlete. The difference between very good and great is sometimes a lot of little things that add up.

One corollary thought is how the success of the starting quarterback has affected the coaching staff and in particular the offensive coordinator position. The prior OU offensive coordinators, Leach, Mangino, Long, and Wilson probably were overly esteemed, recognized, and rewarded as a result of terrific quarterback play. Heupel, the current coordinator, is probably underappreciated at this point for the same reasoning. 

Back to Blake Bell. How could he be better utilized? As a fan, I viewed Landry's return for his senior season postponning the NFL draft as potentially a very good thing (best of both world's with an experienced QB plus an opportunity to bring Blake Bell along slowly for maximum play in 2013) or a very bad thing (a disappointing 2012 season and a poorer 2013 as Blake Bell would be much less prepared, some might say squandered). I fear we are well into the latter. What I'd like to see is Bell now incorporated into the offense much, much more. That would give us the chance to move back toward the optimistic senario. Alas, the notable stubborness of company Stoops, a trait that serves him well in much decision making, and the general reluctance of coaches to take proper risks when the risk is perceived as unorthodox stands in the way. 

The revolution from within

For the most powerful empires, revolution resulting in substantial and lasting change usually must come from within. I believe the NCAA has already begun collapsing under the weight of its own injustice and inconsistencies. This report by ESPN's Tom Farrey  reveals much about how troubled some of those within the upper ranks of the NCAA cartel are by the illogical house of cards that is the student-athlete to institution relationship.

Here are some choice passages:

"This whole area of name and likeness and the NCAA is a disaster leading to catastrophe as far as I can tell," wrote [University of Nebraska chancellor Harvey] Perlman, a former member of the NCAA Board of Directors and law professor specializing in intellectual property. "I'm still trying to figure out by what authority the NCAA licenses these rights to the game makers and others. I looked at what our student athletes sign by way of waiver and it doesn't come close."

...

 A stalwart of the NCAA's economic model that redistributes money from revenue sports to other parts of the athletic department and university, Renfro [, NCAA senior policy advisor who has worked at the NCAA since the 1970s,] proposed a re-focusing of sports on the educational mission of universities. At the same time, he conceded that the philosophy underpinning the model has become antiquated -- and even posed whether the time has come to allow athletes to hire agents.

I was amazed by some of the counter "arguments" made by others within the cartel. Go read the whole thing.

A New Hope, the rebels are organizing

Warren Zola of The Sports Law Blog brings good news in the struggle for justice against the mighty NCAA cartel. The plaintiffs in the O'Bannon vs. NCAA case have moved to have their case certified as a class action and seek to have the damages used to pay college athletes via trusts. I feel a disturbance in the force...

Required listening

Econtalk's latest: sports economist Roger Noll.

Perhaps no other field of application demonstrates the unique and powerful perspective of the economic way of thinking than does sports economics.