All our previous book reviews (along with this one) can also be found here.
Paul Oyer’s “An Economist Goes to the Game: How to Throw Away $580 Million and Other Surprising Insights from the Economics of Sports” is a fun and highly enjoyable way to explore the brilliant world of economics through the lens of sport.
The book takes readers on a journey through a collection of sports stories, introducing some of the world’s most famous athletes along the way, and demonstrates how core economic concepts are at the very heart of these multibillion-dollar industries. Oyer clearly has a passion for both and uses his deep understanding of economics to identify issues such as opportunity cost, prisoners’ dilemma, and domestic product.
At the outset, the author uses some very nice personal stories of parenting a young child – which I can very much relate to – to demonstrate some of his early insights. Readers are offered insights into his memories of Little League matches and, later in the book, highly competitive table tennis games at home, which are both intuitive and nostalgic. Readers that grew up with competitive parents, siblings or children will immediately understand.
A subtle difference between this book and offerings that currently exist in this space is that it is written by a leading economist with an interest in sport, rather than a sports economist. There is a difference, and those that have little or no understand of core concepts in economics will thoroughly enjoy the examples and stories throughout and learn something along the way.
The early chapters of the book look at parental ‘investment’ in children, why people cheat in sport and whether elite athletes are worth all that money!? As Oyer points out early on “Youth is one of the most valuable resources you will ever possess”, and with the passage of time this becomes all the clearer. Kevin Durant, Russell Westbrook, and Steph Curry are used to demonstrate how ‘investment’ can work out – but the probability of success is so low you might be better off doing the lottery.
Comparative (or maybe even absolute) advantage is demonstrated by the success of Norwegian skiers. It helps that Norway has lots of snow. Oyer then goes onto explain why east African runners have dominated long distant running. They naturally don’t make good skiers. There’s some tennis and women’s golf along the way, and he explains the importance of role models like tennis giant Martina Navratilova in shaping women’s tennis in the Czech Republic. Role models matter and path dependency is important.
Cycling provides the prefect prism for the famous prisoner’s dilemma. What does a clean cyclist do if they know everyone else is cheating? The magnificence of Usain Bolt is then described with readers left to question if something is too good to be true, can it be real?
Oyer’s clear passion and skill with labour economics comes to the fore when the pay and performance of leading US athletes is addressed in Chapter 4. One thing this enabled me to do was learn about sports and sports stars and franchises that I am not terribly familiar with, because the book has a clear America focus. There is not much European football (soccer) and reference to other sports, for example horse racing, using American examples when illustrating a point. Non-US readers may learn many new aspects of US sport, while the US audience will readily relate to the players, coaches and teams. MLA, NBA, and NFL dominate many of the examples, which is appropriate given the origins of the field in 1956.
And Rottenberg (1956) makes an appearance in the text. Oyer also speaks to many prominent sports economists and names such as Szymanski, Zimbalist, and Noll – household names in sports economics – are drawn upon.
The latter part of the book addresses more provocative issues such as discrimination in sport, taxpayer subsidies for major sporting events, the business of scalpers and why people gamble. All were fun and insightful but Chapter 7 “How Do Ticket Scalpers Make the World a Better Place?” really caught my attention. It’s a brilliant exploration of this world and the chapter knits together concepts like demand and supply, dynamic pricing, price discrimination and strategic behaviour, with the world of baseball, basketball, and hockey tickets. The book is worth reading for this chapter alone!
Chapter 8 confirms what we already knew – don’t build a stadium with taxpayers’ money or hold a major sporting event unless you want to make a significant loss. The chapter is a nice update on earlier contributions and begins and ends with the lucky escape of Kazakhstan, and the not so lucky Japanese and Russian taxpayers. But they are not alone, and a plethora of American’s are currently paying for publicly funding stadiums for local franchises that could at any point decide to relocate.
Sports gambling – a relatively new legal pursuit in the US market – brings the book to a close. The importance of gamble as a leisure activity (“I’m happy to lose a little because I consume the excitement of awaiting the outcome”) is brought to the fore. And while issues with problem gambling are addressed and explored, and it is acknowledged there are probably much more productive ways to spends one’s money, Oyer stands firm that people can spend as they see fit and there is “nothing wrong with people enjoying themselves”.
A small bit of overtime/extra time sees a hat tip to the failed Super League in Europe. Association football does not appear prominently and the Super League – an American driver project – might make for a fun follow-up. It could consume an entire book!